More than 90% of EPF members under the age of 30 don’t have enough savings to retire comfortably, according to a new report by Khazanah Research Institute (KRI).
The report, titled “Households and the Pandemic 2019-2022: The State of Households 2024” (SoH 2024), was released on Thursday (Sept 26).
The only group in the under-30 category that has enough savings are those in the top 10% of income earners.
According to EPF, Malaysians should aim to have at least RM35,000 saved by age 30 to hit a target of RM250,000 in retirement savings by the time they turn 55.
The report shows that most young workers struggle to reach this goal, mainly due to low starting salaries, which makes it hard for them to contribute enough to their EPF.
The problem is also seen among those aged 30 to 54. Only the top 10% of earners in this age group have saved enough. Many have also withdrawn money from their EPF accounts for things like education or buying their first home, which has reduced their savings.
The pandemic made things worse for this age group. Programmes like i-Lestari, i-Sinar, and i-Citra allowed Malaysians to take out part of their EPF savings between 2020 and 2022, further depleting their retirement funds.
KRI points out that stagnant wages are a major reason Malaysians struggle to save enough. They also suggest that the RM250,000 retirement savings target might not be enough, given that people are living longer and may need more money to support themselves in old age.
