Having enough for retirement

Sound advice: AKPK’s Desmond Chong (right) explaining to a participant the importance of saving for retirement and emergencies, at the EPF Retirement Ready Save Go workshop held at Manipal International University in Nilai, Negri Sembilan.

EIGHT in 10 Employees Provident Fund (EPF) contributors aged 54 years have insufficient savings to sustain them in their retired years, said the social security organisation.

EPF strategic management manager Jamaliah Awang said based on 2014 figures, only 22% or about 17,000 active contributors aged 54 years have achieved the basic amount of RM196,800 for their retirement years.

Also, 164,730 active EPF contributors aged 54 years (or 68% of this age group) have less than RM50,000 in savings with the fund.

“These are, to say the least, worrying figures and suggest that most EPF contributors on the verge of retirement do not have enough savings in the fund for their golden years.

“Based on our definition of basic savings, a retiree will need at least RM820 a month to cover his/her basic necessities.

“This is just the bare minimum and works out to RM196,800 if you multiply the figure by 20 years,” she said at the Retirement Ready Save Go! workshop at Manipal International University in Nilai, Negri Sembilan.

The event was organised by Star Media Group Bhd (formerly known as Star Publications [M] Bhd) in collaboration with EPF, the Credit Counselling and Debt Management Agency (AKPK), and the Private Pension Administrator Malaysia (PPA). The free half-day, the first in a series of seven scheduled over the coming months, was geared towards those approaching retirement, with speakers from the participating agencies on hand to offer advice and guidance on retirement plan.

Jamaliah said while EPF could not prevent contributors from making withdrawals before retirement, the body had a responsibility to inform members on the need for retirement planning, through campaigns aimed at educating them.

“Our life expectancy has increased to an average 75 years and yet most of us do not plan for the years ahead. Act now if you want to live comfortably and independently.

“Retirement planning is important to sustain yourself once you are no longer employed. If you have to make withdrawals, make sure you have enough savings for your old age,” she said, adding that EPF had introduced Retirement Advisory Services (RAS) at several branches nationwide.

The pilot service was launched in July last year at EPF branches in Kuala Lumpur and Petaling Jaya, Selangor. By the end of this year, seven EPF branches across the country would offer the advisory services.

AKPK financial education trainer Desmond Chong Kok Fei said 130,000 Malaysians had enrolled in the agency’s debt management programme since 2006.

“From that figure, 20% did not have emergency funds for any financial crisis. Our role is to educate customers to ensure they have sufficient cash flow by saving a minimum of 10% of their monthly income. In times of crisis or emergency, most people will need between three and six months’ salary to tide them over,” he said.

Through the agency’s debt management programme, financial advisors would outline a plan for clients which would enable them to settle their debts within 10 years.

Chong said the public could approach any AKPK branch for counselling and debt management services.

“There have been cases where people claiming to represent AKPK imposed charges for services. We do not employ third-party agents. Just give us a call and we will assist with your financial queries,” he said.

One workshop participant, headmaster N. Periyasamy, 58, said he intended to share his newfound knowledge with his three college-going children.

“Though I am eligible for pension when I retire, the lessons I learnt today will be useful for my children. Retirement may be something far off when you are young but it’s really best to plan early to ensure you can have a comfortable life,” he said.

Lecturer Tarmidzi Bahauddin, who is due to retire next April, said: “With retirement fast approaching and three children who are still dependent on me, I needed advice on planning for a secure future.

“I think most of us do not know where to start when it comes to planning for our retirement. The speakers addressed some of my concerns.”

The EPF Retirement Ready Save Go! free workshop (9am-1pm) will be held at Sunway College, Johor Baru (Oct 10), The Star Ipoh (Oct 17), The Star Pitt Street, Penang (Nov 7), Menara Star, Petaling Jaya (Nov 14), Malacca (Nov 28), and Menara Star, Petaling Jaya (Dec 6). To register, email jasmine.yeoh@thestar.com.my your name, designation, company, contact and preferred date and venue. For details, call 03-7967 1388 (ext 1050/1133/ 1493). Workshop participants will receive complimentary one-year subscription to The Star ePaper.

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