With the cost of living soaring every day and wages remaining stagnant, Malaysians are finding it difficult to make ends meet, let alone put in money for their retirement fund.
As such, only a handful of Malaysians have been able to save enough money to spend during their twilight years, a figure which has become a cause for concern.
Only 30% Of M’sians have enough EPF savings to last for 20 years
As reported by Nanyang Siang Pau, the Employees Provident Fund’s (EPF) Chief Operating Officer Sazaliza Zainuddin revealed some worrying figures regarding the amount of retirement savings Malaysians currently have.
According to him, only 30% of Malaysians who have an EPF account have been able to achieve the minimum savings standards set by EPF.
Given that the average life expectancy in the region is between 75 and 80 years, if Malaysians retire at 55 or 60, they would need to rely on their retirement funds for 20 years to cover basic living expenses.
“As such, it’s highly recommended that Malaysians have at least 20 years’ worth of retirement savings to ensure a stable and comfortable life,” he said.
When asked what’s the amount needed for each month upon retiring, Sazaliza said that it varies from individual to individual.
“Some people may need RM5,000 per month, which amounts to RM60,000 per year or RM1.2 million for 20 years.
“Assuming that there is no debt after retirement, monthly expenses could be halved to RM2,500. However, one would still need to prepare at least RM600,000 for retirement.
“However, based on the EPF’s basic retirement fund calculation, only 30% of EPF members have been able to survive on RM1,000 monthly for 20 years after retirement,” he explained.
Urged M’sians to start saving
In light of these worrying numbers, Sazaliza called upon EPF members who have not contributed for a year or are inactive to resume contributions immediately and increase their contribution rates.
As for self-employed individuals and Malaysians who have shifted to the gig economy, they are encouraged to take part in EPF’s i-Saraan plan to avoid having insufficient funds in covering basic living expenses for 20 years after retirement.
Speaking of savings, the deadline to opt transferring part of your EPF savings to Account 3 is on Aug 31:
