PETALING JAYA: Those using the Employees Provident Fund’s (EPF) i-Sinar facility should ensure they do not end up losing everything by investing in speculative instruments, financial experts have cautioned.
They added if these investments show a profit, the money should be put back into the contributor’s EPF account.
Sunway University Business School Economics Prof Dr Yeah Kim Leng said money from the EPF should only be used to deal with problems contributors are facing and not for other purposes.
He said those using the money to invest in gold, cryptocurrency, shares and other investments must realise there is a possibility these investments could fail.
“There is a likelihood that investments in such things may pay off big but there is also the possibility a person may lose his shirt.
“People must be aware they can lose everything and be extremely wary when making such investments,” he said.
He added by reducing their EPF savings, contributors’ earnings will also drop thus having an impact on their retirement.
The problem that exists today is those in the medium and low income bracket are hoping for high returns from their i-Sinar money.
“Such people cannot afford to suffer any major losses, they cannot simply shrug it off and walk away from it.
“Their retirement savings are compromised once they take out money to make such investments.
“Those in the high income group have the ability to take a hit and still be able to have a comfortable retirement,” he said.
Yeah urged those who use their i-Sinar funds for investment purposes to ensure they put back the money into their accounts.
He said there is always an urge to use the money or profits for big ticket items and by doing so they are only hurting themselves.
By putting money into investments they have a duty to ensure the profits go back into their long-term savings.
Up until March 14, i-Sinar withdrawals of RM52.48 billion had been approved for 5.94 million applicants.
Finwealth managing director Felix Neoh said people should only withdraw their money from the EPF to meet the income shortfall and not for investment.
He said if they were to invest their EPF savings they should ensure their investments can do better than the fund.
“People who are planning to invest their EPF money must realise the market can be very volatile.
“For example, gold is seen as a good investment but its value depends on market sentiment. It can go down as easily as it can go up,” he said.
Neoh said one of the main purposes of investing is to meet a person’s long-term savings and retirement plans.
He said those using their i-Sinar money should ensure all profits from their investments are put back into their EPF savings and not used for other purposes.
