WHEN you mention money, most people are full of plans on how to make it.

Business plans and lofty moneymaking opportunities can be a hot topic of discus sion, but mention savings and you’ll usually find the flow of conversation come to a crashing halt.

Saving isn’t sexy. It’s a lot more fun to talk about how much money you make or will potentially make rather than how you scrimped.

Which is probably why savvy investors are happy about the ‘Beyond Savings’ scheme that the Employees’ Provident Fund announced last Friday.

It al lows members to access funds in its Account 1 to invest in approved institutions.

Not everyone is good with monitoring their money.

That’s what the EPF is for: to ‘force’ people to save for retirement.

Critics might argue that they can get a better rate of return from diverting their funds in the EPF to other investment vehicles like unit trusts.

This means that you can now diversify your investments.

But opting for a higher rate of return also means exposing yourself to more risk.

Even EPF deputy chief executive officer (operations) Ibrahim Taib cautioned that members must be careful where they invest or risk losing their principal sum.

This is the second time in the last 12 months that EPF is offering more flexibility and choice to its members.

Earlier, it introduced a housing loan monthly instalment withdrawal scheme where qualified members can use their EPF savings in Account 2 to pay off their housing loans.

Those who apply will find a few hundred ringgit extra in their savings account, but there’s no telling whether this goes towards paying off the loan on a house or towards a new plasma TV.

While it’s a good thing that the EPF has moved towards allowing more choice and flexibility for its members to make their own decisions and control their finances, keep in mind that EPF savings are funds that will cushion you and see you through your golden years.

If you want to invest, per haps one should find the extra funds through exploring altern ate sources of income or reigning in expenditure to free up money instead of deflating your retirement cushion.

Sujartha K.
Assistant editor, Lifestyle

Source: Malay Mail – January 30, 2008