The Employees Provident Fund (EPF) has announced a significant increase in the basic retirement savings benchmark, which was previously set at RM240,000 and has now been raised to RM390,000.
This adjustment comes alongside a revision of the retirement age benchmark, which has been increased from 55 to 60 years old.
According to NST, this development was revealed during the launch of EPF’s Retirement Income Adequacy (RIA) framework and the updated Belanjawanku 2024/2025 guide.
The RIA framework, set to come into effect in 2026, is designed to ensure retirement income security and adequate savings for retirees.
It features a three-tier savings structure, anchored on the retirement income adequacy determined by Belanjawanku.
The Belanjawanku guide, created in collaboration with the Social Wellbeing Research Centre, estimates the minimum monthly expenses required for a decent standard of living.
Initially focused on the Klang Valley, it now covers 11 additional major cities across Malaysia.
According to the RIA framework, based on current price levels, retirees at 60 years old will need:
- RM390,000 to cover essential retirement needs.
- RM650,000 for a reasonable standard of living.
- RM1.3 million for greater financial security and a higher quality of life.
Gradual Policy Changes Until 2028
To ensure a smooth transition, the EPF will implement changes incrementally over three years.
The basic savings amount will increase by RM50,000 annually, reaching the RM390,000 target by 2028.
Similarly, the withdrawal policy for members with savings exceeding RM1 million will align with the enhanced benchmark of RM1.3 million.
The threshold for withdrawal will increase by RM100,000 annually, enabling members with over RM1.1 million in 2026 to withdraw any surplus.
To stay relevant amidst rising costs of living, the RIA savings benchmarks will be reviewed every three years starting in 2029. These reviews will incorporate updated findings from Belanjawanku.
EPF Chief Executive Officer Ahmad Zulqarnain Onn highlighted the significance of these initiatives, stating, “The Belanjawanku guide and RIA framework are cornerstones to EPF’s purpose in building a better retirement future for all Malaysians. The guide helps average Malaysians navigate the challenges of managing household expenses, while the EPF establishes a strong foundation for building adequate retirement savings.”
What do you think about this? Share your thoughts with us in the comment section.
READ ALSO:
