Home » Education

How to Calculate the Retirement Fund in your EPF Account

Ranked #3,768 in Education, #90,170 overall

Employee Provident Fund in Malaysia

Every employee in Malaysia is compulsory to contribute 11% of his/her salary into EPF account. Employer will match your contribution by 12-19%

Common Scenario

How to estimate the total amount in your EPF account?

You started your career as an engineer at 24 years old with a starting pay of RM2500 per month. Contractual bonus is one additional month. The average salary increase during your lifetime is estimated at 7% per year. EPF pays an average annual dividend of 5% p.a. Your contribution to EPF is 11% of your salary and 12% is contribution from your employer. How much will you get when you retire at age 55?

Prepare for retirement now!

Loading

Theory



where i = EPF dividend rate;
n = number of years;
A = initial amount of deposit
g = rate of salary growth
FV = future value of EPF account

Imagine your retirement life 

Solutions

ou started your career as an engineer at 24 years old with a starting pay of RM2500 per month. Contractual bonus is one additional month. The average salary increase during your lifetime is estimated at 7% per year. EPF pays an average annual dividend of 5% p.a. Your contribution to EPF is 11% of your salary and 12% is contribution from your employer. How much will you get when you retire at age 55?
Photo by wmjas

First step is to find out the various variables.

The initial amount of deposit, A = RM2500 x (12+1 months) x (11+12)%

A = 2500 x 13 x 0.23
   = RM7475

The number of years, n = 55-24 = 31 years

The EPF dividend growth rate, i = 5% p.a. = 0.05

The salary growth rate, g = 7% p.a. = 0.07

Substitute the variables in the formula above.
The total fund in EPF, FV = RM1.379 million

In order to give you convenient tools, there are several web-based EPF calculators developed:
EPF calculator by RHB BANK

Calculator: How Much Will your EPF be Worth? by Mayban Life

Download the Free Money Tips Ebook for Malaysians

Retirement Planning Books

When a man retires and time is no longer a matter of urgent importance, his colleagues generally present him with a watch. ~R.C. Sherriff

New YouTube vids

Ben Stein Talks Retirement -- Part 1
by NRPC07 | video info

119 ratings | 62,388 views
curated content from YouTube

Personal Finance Malaysia

Learn more about moey management

Read updated money articles at KCLau.com
Loading

Do you prepare for retirement? (beside EPF)

  • Dec 1, 2010 @ 7:13 am | delete
    nice lens, thanks...

    Go Trends
    Finance
    Loan
    Go Banks
    Free Articles
Show All
Feeling creative? Create a Lens!

Explore related pages

Related Tags