KWSP Withdrawal at Age 55 & 60: Rules, Options & HR Guide for Employers in Malaysia

When employees reach a certain age, their KWSP account and withdrawal options will change.

For HR and employers, this is important not because you manage their withdrawal directly, but because it affects:

Payroll handling
Employee planning
Workforce management

This guide explains what happens at age 55 and 60, and what HR should prepare.

What Happens When an Employee Turns 55?

At age 55, an employee officially enters early retirement stage under KWSP.

Key Change:

All savings from:

Will be combined into Akaun 55.

What This Means

Employees can withdraw all or part of their savings anytime
Withdrawal is optional (not mandatory)
Employees can still continue working

What Happens If Employee Continues Working After 55?

If the employee is still working:

KWSP contribution continues as usual
New contributions will go into Akaun Emas
This account is generally accessible starting at age 60

What Happens at Age 60?

At age 60:

Employee reaches full retirement age
Savings in Akaun Emas can be withdrawn
Employee may choose to:
- Retire fully
- Continue working

Employees will have full access to their retirement savings, including Akaun Emas, subject to KWSP withdrawal rules.

KWSP Withdrawal Options at Age 55

Employees have several options:

Full withdrawal (take all savings)
Partial withdrawal
Monthly withdrawal (minimum RM100/month)
Combination of partial + monthly

Image source: Make A Smooth Transition Into Retirement

What HR & Employers Should Pay Attention To

Workforce Planning

Employees aged 55+ may:

Consider retirement
Request flexible work
Reduce working hours

HR should plan early to avoid sudden manpower gaps.

Payroll & Contribution Continuity

As long as employee is still working:

KWSP contribution must continue
Follow correct rates based on age

Clear Communication

Employees may be confused about:

Withdrawal options
Contribution after 55
Retirement timeline

HR can help by:

Sharing simple guidance
Avoiding misinformation

Retention Strategy

Senior employees bring:

Experience
Stability
Industry knowledge

Companies may consider:

Contract extension
Part-time roles
Mentorship positions

Special Case: Government Pension Employees

For government employees:

They must return government contribution (KWAP)
This is handled through Pre-PEN application

HR in government sector must ensure:

Proper documentation
Correct process before withdrawal

Who Can Apply for Age 55 Withdrawal?

Employees must:

Be 55 to 59 years old
Have savings in Akaun 55
Malaysian or non-Malaysian

Summary

Age	What Happens
55	Can withdraw KWSP (optional)
55+ working	Contributions continue (Akaun Emas)
60	Full retirement withdrawal available

Common Misunderstanding

“Employee withdraw KWSP = must retire”

This is NOT true.

Employees can:

Withdraw savings
Continue working

Conclusion

KWSP withdrawal at age 55 is mainly for employees, but it still affects employers in terms of planning.

For HR and employers:

Understand the change in KWSP structure
Continue proper payroll contribution
Prepare for employee retirement planning

Managing this well helps ensure:

Smooth workforce transition
Better employee experience
Stronger company planning

FAQ (Quick Answers)

Can employees withdraw KWSP at age 55?

Yes, full or partial withdrawal is allowed

Does employee need to retire at 55?

No, they can continue working

Should employer stop KWSP contribution at 55?

No, contribution continues if employee is still working

What changes at age 60?

Employee can withdraw from Akaun Emas

Does withdrawal affect payroll?

No, unless the employee resigns or retires

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