For every Malaysian, the Employees Provident Funds (EPF) is an essential aspect of their means to live on the money they’ve saved when they retire or are no longer physically able to work.
Unfortunately, a sizable amount of Malaysians have been found to splurge their hard-earned savings within a short period of time instead of spending it frugally.
25% of M’sians drain their EPF savings within 5 years
While giving a speech at at the launch of the International Social Well Being Conference (ISWC) today, prime minister Anwar Ibrahim revealed that based on data provided by EPF, it showed that 1 in 4 Malaysians (25%) have completely drained their savings within a span of five years after reaching 55 years old.
According to the EPF website, Malaysians are deemed to have officially retired when they turn 55 and are allowed to withdraw a partial or full amount of their EPF savings.
Anwar added that due to the lump-sum nature of the EPF benefit, many Malaysians have been unable to live comfortably upon retiring or manage longevity risks.
A recent survey found that 26.1% of respondents aged above 60 will continue to work until their health fails as they face challenges in achieving income security to finance their retirement needs.
“The elderly have also been found to be more vulnerable to poverty compared to the average Malaysian population, where 29% of them have a pension or pension-like income during retirement.
“We need to actively seek reform in the Malaysian pension framework in order to ensure that every generation in Malaysia will be able to look forward to growing old with dignity,” he said as quoted by NST.
EPF coverage to be further expanded
In light of this problem, Anwar said that EPF coverage will be expanded in stages so that more working-age Malaysians will have the chance to save up for their retirement.
He added that the government is also committed to enhance the lives of older Malaysians and create an inclusive and just society for all citizens, which is in line with the Malaysia Madani concept.
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