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What are the hard lessons of withdrawing EPF Account 2 for a house downpayment

I'm 32 and finally buying my first apartment in Cheras. Agent told me I can withdraw from KWSP Account 2 to top up the downpayment and legal fees. Sounds good but I'm worried about touching my retirement money. For those who already did this, any regrets or things you wish you knew before?

Anonymous asker ·Asked on 20 days ago ·683 views ·5 answers

[Question] What are the hard lessons of withdrawing EPF Account 2 for a house downpayment
I'm 32 and finally buying my first apartment in Cheras. Agent told me I can withdraw from KWSP Account 2 to top up the downpayment and legal fees. Sounds good but I'm worried about touching my retirement money. For those who already did this, any regrets or things you wish you knew before?

[Answer 1 | Auntie Retire Devi · Best Answer]
I withdrew about RM38,000 from Account 2 in 2019 for my house in Kajang and honestly I don't regret it, but here are the real lessons. First, the money compounds at around 5-6% dividend yearly, so that RM38k could have been maybe RM60k+ by retirement, that's the real cost you're paying. Second, the withdrawal is not instant, it took me almost three weeks after submitting through i-Akaun with the S&P agreement, so don't promise the developer you'll pay by a certain date. Third, you can only use it for the property purchase or to reduce the loan, not for renovation, so plan your reno cash separately.

[Answer 2 | Grab Driver Kumar]
One thing many people forget, you can withdraw yearly from Account 2 to reduce your housing loan principal, not just at purchase. I do this every year with my bonus top-up and it shaved almost four years off my loan tenure. Check the monthly loan reduction option on i-Akaun.

[Answer 3 | Cikgu Aisyah]
I did it and my only regret is I withdrew more than I needed because I panicked about cash flow. The extra just sat in my current account earning nothing while it could have earned 5% in EPF. Withdraw exactly what you need, not a ringgit more.

[Answer 4 | Auntie Chan Wet Market]
Documentation is the annoying part. KWSP needs your stamped S&P, the loan offer letter, and sometimes the redemption statement. I got rejected first round because my S&P wasn't stamped by LHDN yet. Settle the stamping first before you apply.

[Answer 5 | Tiger Mum Mei Ling]
Just remember your Account 2 is not free money, it's your future self's money. I'd only touch it if not touching it means you can't buy at all. If you can cover the downpayment with savings, leave EPF alone to compound lor.

Source: ASK https://my.a-sk.org/q/b5-my-02-what-are-the-hard-lessons-of-withdrawing-epf-account-2-f-4311

This page contains personal experience shared by users about Finance, not professional advice. For important decisions, please consult a qualified professional or official channel.

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Auntie Retire Devi Beginner First-hand experience Retired teacher, I explain pension option, GCR payout and how to isi masa after pencen.

I withdrew about RM38,000 from Account 2 in 2019 for my house in Kajang and honestly I don't regret it, but here are the real lessons. First, the money compounds at around 5-6% dividend yearly, so that RM38k could have been maybe RM60k+ by retirement, that's the real cost you're paying. Second, the withdrawal is not instant, it took me almost three weeks after submitting through i-Akaun with the S&P agreement, so don't promise the developer you'll pay by a certain date. Third, you can only use it for the property purchase or to reduce the loan, not for renovation, so plan your reno cash separately.

Grab Driver Kumar Beginner First-hand experience Full-time Grab 6 years, I know petrol cost, incentive game and best makan spots lah.

One thing many people forget, you can withdraw yearly from Account 2 to reduce your housing loan principal, not just at purchase. I do this every year with my bonus top-up and it shaved almost four years off my loan tenure. Check the monthly loan reduction option on i-Akaun.

Cikgu Aisyah Beginner First-hand experience SK teacher 18 years, I know UPSR-lepas syllabus and how to handle anak yang malas study.

I did it and my only regret is I withdrew more than I needed because I panicked about cash flow. The extra just sat in my current account earning nothing while it could have earned 5% in EPF. Withdraw exactly what you need, not a ringgit more.

Auntie Chan Wet Market Beginner First-hand experience Sell vegetable at pasar 25 years, I tell you straight which biz idea will mati fast.

Documentation is the annoying part. KWSP needs your stamped S&P, the loan offer letter, and sometimes the redemption statement. I got rejected first round because my S&P wasn't stamped by LHDN yet. Settle the stamping first before you apply.

Tiger Mum Mei Ling Beginner First-hand experience Two kids in private school, I survived tuition drama and PIBG politics, tanya je.

Just remember your Account 2 is not free money, it's your future self's money. I'd only touch it if not touching it means you can't buy at all. If you can cover the downpayment with savings, leave EPF alone to compound lor.

What are the hard lessons of withdrawing EPF Account 2 for a house downpayment

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