Withdrawing EPF money for Holidays

While I was in Malaysia, I heard a story that I thought was rather… shocking.

There’s this person that lives around my neighbourhood. He recently went overseas for a holiday.

What is shocking is that he had withdrawn a sum of money from his Employees’ Provident Fund (EPF) account to fund his holiday trip. In Australia, their version of EPF is called Superannuation Fund, and in the US, if I’m not mistaken, social security right?

Now that’s a ‘smart’ move don’t you think? Take note that he still has a lot more years to go through before his retirement.

I have no idea how is it possible for a person to withdraw money from their EPF accounts to purchase unrelated goods and services. I’m not really that familiar with EPF and its practices but I thought that you can only take out your money for certain things only? Like paying off your home mortgage, your children’s tertiary education, buying a computer, and etc., but for holidays? Hmm…

There’s a reason why it is called a retirement fund.

Now, to me, I think the money can be put to better use. Say, for investments? Then, use some of the profits from that investment to fund your holiday trips. If it is not enough to fund your Europe Tour, then settle for something low-key, such as a trip to Phuket? or Bali? Living within your means is the way to go.

However, of course, at the end of the day, it’s his money, he can do whatever he wants with it. Just that I hope, his actions now will not catch up to him in the future (not being able to enjoy retirement, children having to go for study loans to fund their tertiary education because daddy doesn’t have enough money, etc. etc.).

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Other related posts:

The Importance of Cash Flow
Back to Basics: Asset, Liability, Equity
When can I consider myself financially free? Part 1
What is Financial Freedom
Understanding Unit Trust
Debt. Is it a good thing?

About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.


  1. Thanks for sharing

  2. I don’t really agree with the fact that KWSP will deposit the money to our personal account rather than our loan/mortgage (or whatever it is called) account. In doing so will subject the money to abuse. Instead of using the money for ‘noble’ purposes like paying off home loans, investing and etc., the money might instead be used to purchase doodads, and perhaps… holidays?

    While the underlying intention of the government is to perhaps pump more cash into the economy, don’t you think this is a rather short-term solution?

    EPF (or KWSP) is known as a retirement fund for a reason. It is for….. retirement.

    If the government allows money to be “abused” now, that might lead to us not having enough money in the future. Which means, Malaysian people will complain of not having enough money, request subsidies and “help” money from the government, request money from Lembaga Zakat, and etc.

    Being able to withdraw EPF money to invest in unit trust or other higher yielding assets is great. Being able to withdraw EPF money to pay off home loans is also great. However, being able to withdraw money from EPF and put them in personal accounts, with the risk of abuse, not great.

  3. Withdraw money from EPF and put into personal accounts? If not mistaken, you have to prove to them that you’re having housing loan then you’re only able to withdraw the money. After that, whether you’re using the money for your loan, house renovation or even your vacation, is it really up to you. As you said, this is their money and they have the rights to do whatever they want. Having said so, I do agree with you that the EPF organization shouldn’t give people chances to abuse it. Maybe they have different purpose of doing that? They purposely mean to be abused? Who knows? 😀

  4. Yup, you do have to prove to them the purpose of your withdrawal. Say, for housing loans. I’m assuming that that’s how the person in my neighbourhood had withdrawn the money in the first place.

    Just that, I still think that we shouldn’t give any room for people to use that EPF money for the wrong reasons. For example, like the computer scheme before, people can just come up with fake receipts, add a few other non-existent things in their invoices, and voila, you get your money.

    If a person gets his EPF money every month for the purpose of paying off his home mortgage but instead, he uses it for something else, when the time comes (i.e. when he retires), he will have a lot less in his EPF account and his house is still not fully paid off. Socially speaking, that’s bad.

    Anyway, just a thought 🙂

  5. wow what a “sleek” move. my mom would kill me before i can withdraw my epf to go for a holiday >.

  6. oohh…that’s a big no no

    taking out money from gained interest from an invested unit trust fund may be better…that’s a reward. Taking out money from EPF? ish ish ish, babap je tangan tu

  7. Don’t ever touch your EPF balance no matter what, we don’t what will happen in the future. the money is used for your retirement only and no other purposes. It maybe your last hope when you get old and you really need more than anyone else.

  8. Yes, I agree. In fact by just EPF alone, it is usually not enough.

  9. well, I guess this person did not think too far ahead.. either that or he’s got enough $$ (though I doubt it)

  10. I couldn’t have put it better myself folks. Agreed, leave the EPF money alone. Those money is for retirement.

    Only withdraw (if you’re comfortable with extra risks) for higher-yielding investments, not for depreciating assets.

  11. EPF comes with account 1 and 2. NO ONE can withdraw Acc 1 unless is meant for investment with an approached institution. Acc 2 can be withdrawn yearly for housing loan. Withdrawal of EPF for a holiday is of course a No NO…I really has no clue how he does it. Have you checked his age? If he is above 55 years old, he has an option to withdraw all or portion of his EPF balances from both Acc 1 & 2 (wef 1.2.2008)

    Nadlique, you are right about not using our EPF money to fund the depreciating assets. Per EPF survey, majority of the EPF members spend away the entire EPF sum within 3 years from their retirement year. Can you imagine that! What’s the life would be without income and without CASH in the bank! What make it worst – thanks to modern medical facilities, we actually live longer (not sure should give you a smile or crying icon, it depands how much we have in bank by then, I suppose)

    Why aren’t people plan their finance then? well, sad to say, not many have a mind of financial planning. Perhaps don’t even know the true meaning of financial freedom…….

  12. If I’m not mistaken, he was well below 55 years old.

    I believe, he did withdraw money from his account and told EPF that it was to repay his home loan but instead, it was used for other non-beneficial purposes.

  13. I guess the mindset of “enjoy now, suffer later” is still strong in our society.

  14. sad…

    I am so eager to share with others that it is NEEDFUL to plan our finance while we are able!

    Many said “life is short, enjoy first” OF COURSE..but what if it is not short???

  15. I guess that’s the reason not everybody can become wealthy, eh? 🙂

  16. slm.which one u prefer epf or pension.why?tq

    • w’salam.

      it’s hard to say really.

      if it was me, I’ve got to assess my own situation first. Look at how much of assets do I have as well as how big is my already established income stream.

      one thing that I’m afraid of when getting a huge lump sum in one ago, which in the case of EPF, is that I might not be so prudent with it. however, if I was really confident with my own “money discipline”, then I might take the lump sum and invest in assets to set up more income streams.

      whatever it is, if it was me, the main important thing I would think about for retirement is setting up as many income streams as possible. so, i really can’t go wrong with either EPF lump sum or pension. (sorry for being too vague)

      oh, another thing to think about is the taxation issue of things.

      again, you need to really know about your personal situation first before deciding which is best for you.

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