Malaysia 2021 Budget is trending in the country. The past months have not been easy. In fact, we are in the months of living cautiously. The normal is abnormal and the abnormal is normal. Let’s face it 2021 is approaching, let us move forward without whining and sulking. Business as usual is in the new norm. The most important thing is to start strategizing.
The 2019 and 2020 covid-19 pandemic are raging. We know it’s tough. Its not easy planning to plan actually. Reality bites, we have to realise whats available for us to twitch. On November 6, 2020, Malaysian 2021 budget (“Budget”) was announced indicating Government’s approach to economic recovery. In this write up we will discuss and share information that beneficial to our financial plan that suits our respective affordability.
One of the trending key points was the ability to withdraw Employee Provident Fund (“EPF”) savings from Account 1 under i-Sinar facility to provide protection to active members who have lost their job, given no pay leave and lost their source of income. Whoever plan to withdraw by early 2021 have to start planning and spending it wisely. Basically, we have reduced the average of 4-5% dividend each year that could accumulated until our retirement age of 55 years old. Thus, our golden nest has been inclined.
The EPF is also considering members to withdraw from their Account 2 to purchase insurance or takaful products covering life/family and critical illness from approved insurance operators or takaful providers. This is the most valuable opportunity for those who have not had any personal Takaful/Insurance that cover themselves or family that suits their need.
I-Lestari withdrawal is an option from EPF account 2 to be utilised from April 1, 2020 until March 31, 2021 with the amount ranges from RM50.00 to RM500.00 monthly. The age of the account holder is below the age of 55 years old and have balance in EPF account 2.
Additionally, there will be an increase in the tax relief limit on medical expenses for ourselves, spouse and children for serious diseases from RM6,000.00 to RM8,000.00, and tax relief for expenses on full medical check-up from RM500.00 to RM1, 000.00. Furthermore, the tax relief limit on expenses for medical treatment, special needs, and parental care is also increased to RM8,000.00 from RM5,000.00
In addition to health protection, the Government is planning to expand the B40 group social protection by giving out RM50.00 voucher to purchase life takaful and personal accident.
These initiatives indicate the government commitment to ensure the people have proper takaful/protection to cover our health, retirement and also to protect our income. Healthy nation indicates Happy Nation. Our neighbour, Singapore has allocated an account as part of their Central Provident Fund (which is similar to our EPF) for health protection plan for their citizens. It shows the seriousness of developed countries on health plan to their people. We believe that our country also would plan be at par with the progressive nation in the world and part of it is having an adequate protection for the people.
We do not know when how our future be like but we surely know that we need to plan and strategize our future for better living. Let us do this together. Our protection of today will be our source of comfort for tomorrow. Big time.