The govt announced that we can reduce contribution from 8% to 11%. With this announcement, I am sure you heard quite a lot of rumors. I shall not anymore oil into the fire.
Last week, I received my company memo that it will be a default 8% contribution. If anyone wants to remain at 11%, we need to sign a form.
Now, the decision, should I sign or not? I don’t think the extra 3% is going to make a difference for me. You may say I can invest the 3% elsewhere. The question is whether the investment can measure up to the dividend given by EPF. Now fixed deposit interest rate is also lowered. I wondered what % dividend we will get from EPF this year. Any rumors?
I bet most of the younger generation will spend the extra 3% which is not good for their future. It means less money when they retired. Older generation will be wiser to keep the 3% in EPF. By the way, I saw a long list of signatures.
Should I sign or not?
I’m staying at 11% as its more to a forced savings. If you get additional cash, surely it will be used up once a while. I can’t invest into ASB anymore as it is full and like u said, bank fixed deposit rates are horrible nowadays.
I read financial blogs, they said if you meet the maximum income tax deduction for EPF and insurance, you should just take the additional cash, else, stay at 11%.