This article first appeared on Ringgitplus. Visit the site for more articles on personal finance.
The current COVID-19 pandemic has wreaked havoc all around the world.
A lot of workers have lost their jobs and sources of income, and more and more people are finding it hard to make ends meet.
Thankfully, the government has allowed eligible Malaysians to dip into their retirement fund to help pay the bills.
While it is not surprising that such a move would benefit the lower income tier, it seems like the nation's top 20 per cent group (T20) have been withdrawing from their retirement savings too.
In a survey conducted by the UCSI Poll Research Centre, almost half of the participants in the T20 income group said that they used or would use their Employees Provident Fund (EPF) i-Sinar withdrawal money to invest in gold and stocks.
As many as 47.7 per cent of the T20 group participants said that they were using their EPF i-Sinar funds for investments.
There were also participants from the M40 and B40 groups who were withdrawing their EPF funds for this purpose, but at a lower percentage of 31.1 per cent and 35.5 per cent respectively.
“Interestingly, investment was one of the main reasons for a i-Sinar withdrawal, particularly among the T20 group,” the research centre said in a statement.
According to the survey, most of those who cited this use of i-Sinar funds were aged between 40-55 years old.
“Even in these challenging times with the COVID-19 pandemic, there are people who see an opportunity and seize it.”
For those in the 26-55 age bracket in the B40 and M40 income groups, repayment was the main justification for their EPF withdrawals.
It was found overall that only 48.6 per cent of the 809 survey respondents used the money for food and groceries.
The i-Sinar programme is a withdrawal facility introduced by the Malaysian government to help those facing financial difficulties due to the COVID-19 pandemic.
EPF members who fit the eligibility criteria can withdraw up to RM10,000 or up to 10 per cent of their Akaun 1 savings, depending on their balance in Akaun 1. You can read more of our coverage on the facility here.