IT COMES as no surprise to most workers that their savings in the Employees Provident Fund (EPF) will be insufficient in future.
While they are also aware that the most logical thing to do is take steps to boost their retirement funds now, most say they simply cannot afford to do so.
Clerk Kristy Chee, 36, said except for her EPF savings and some money in a fixed deposit account, she had no other retirement plans.
“Of course, I am aware that my money in EPF is insufficient to get me through my old age but what can I do?
“Whatever extra money I have now goes towards my children’s education and healthcare.
“My hope is that they would be able to obtain scholarships or at least study loans and not have to depend on me to pay for their tertiary education,” said the mother of two.
Chee added that she was aware money placed in fixed deposit accounts would not grow and she stood to lose because of inflation.
“I have no clue how to invest my money.
“Hence, the safest place is to put it in a fixed deposit account,” she said.
Likewise, administration officer L. H. Cheng, 38, said she does not have extra resources to plan for her future.
“As I can’t do anything about it, I just push away the thought and focus on the here and now,” she said.
“I foresee old folks’ homes being filled to the brim with the elderly.
“But they are the lucky ones, those who have nowhere to go will end up on the streets begging for money,” she said.
Cheng expressed hope that the Government would do more to help.
“For example, by providing better healthcare services and giving monthly relief payments to the elderly like what is done in other countries.
“With RM800, there is no way one will have enough to eat, what more to seek medical treatment,” she said.
It was reported that 80% of workers would have savings below the nation’s poverty line of RM830 monthly as they turn 55.
EPF chief executive officer Datuk Shahril Ridza Ridzuan had said workers would not have enough in total EPF savings to enable them to live on RM800 a month for the next two decades.
He explained that it was because most people had low wages during the time they started contributing to the fund in the 1980s and continued earning relatively low salaries until age 55.
Insurance agent Steven Chin Wee Juan, 37, said surely RM800, coupled with inflation, was not enough money for the elderly to survive on.
“I think workers should look at ways to diversify their savings and investments, rather than put them all in the bank where they stand to lose because of inflation.
“They don’t necessarily have to invest in insurance products.
“There is a private retirement scheme by the government whereby they can invest as little as RM100 per month. Investors are not penalised even if they skip a month or two in payments,” he said.
Chin said it was also unwise for workers to withdraw their savings from their EPF accounts.
“Just like how a monthly investment of RM100 per month can grow into something much more in years to come, we are actually depriving ourselves not only of the sum that is being withdrawn but the compounded interest that could have been derived if the money was left untouched,” said Chin.
To help workers, Chin said the Government could perhaps stop giving out 1Malaysia People’s Aid (BR1M) handouts.
“Why give money to able-bodied young people who are still capable of working?
“Instead, the Government should give that money to retirees in the form of retirement benefits such as better healthcare services. Even a RM100 handout per month is better than nothing.
“The Government should also consider setting up government-funded old folks’ homes,” he said.
Second Finance Minister Datuk Seri Dr Ahmad Husni Hanadzlah’s special officer Ting Tai Fook said Malaysia was not solely facing the problem of its workers not having enough to survive on when they retired.
“This phenomenon affects workers in developed countries such as Australia and the United States as well.
“The question is how do we overcome this?
“I think workers have to increase their productivity and change their employers’ perception of them.
“They need to work hard and work smart to help their employees increase profits. Workers need to make themselves appear invaluable to their companies while bearing in mind that they can always be replaced.
“That way, their employers will be more than willing to promote them and increase their salaries,” he said.
Also discouraging workers from withdrawing their savings from the EPF, Ting said the fund paid a much higher compounded interest compared to the banking sector.
“There have also been cases of people who withdrew their savings from EPF to buy computers but ended up using them for other things to ‘improve’ their lifestyles.
“Whereas our country’s Generation X favoured putting their money into their savings and fixed deposit accounts, the present Generation Y prefer spending their money on the latest gadgets and hanging out at expensive food joints.
“They are not bothered about their future so long as they get to spend money to show others they are living a good life.
“This, of course, is a fallacy,” said the 31-year-old.
Ting added that unless the present generation of workers changed their spending behaviour as well as attitude towards investing, money would never be enough.