‘Malaysians not saving enough for retirement’

Another fiscal year: (From left) Tunku Alizakri Raja Muhammed Alias, Datuk Shahril Ridza Ridzuan, Datuk Mohamad Nasir Latif and Mohd Naim at the launch of EPF’s annual report in Kuala Lumpur.

KUALA LUMPUR: One in three Malaysians does not have a savings account, and most have not saved enough to last them more than five years after leaving the working world, according to the Employees Provident Fund (EPF).

“Ninety percent of rural households have zero savings, while in urban households, 86% do not have savings.

“Malaysians need to be empowered and take charge of their own financial decisions according to their life stages,” said EPF deputy chief executive officer (operations) Datuk Mohd Naim Daruwish.

At the unveiling of the EPF’s annual report yesterday, Mohd Naim highlighted that as of last year, 68% of EPF members aged 54 had savings of less than RM50,000.

“Assuming that the members spend RM830 per month, RM50,000 in savings can only last them for five years,” he said, adding that half of former EPF members had exhausted their savings in that time period.

The report also stated that only 18% of EPF members achieved the basic savings quantum according to age, a far cry from EPF’s plan to get at least half of its members to meet the minimum basic savings according to age in the next five years.

Basic savings is a pre-determined amount set according to age so that members can achieve minimum savings of RM196,800 by the age of 55, enough to support basic retirement needs for the next 20 years.

For example, by the age of 35, a member is recommended to have RM46,000 in basic savings, which should increase to RM102,000 at age 45, RM143,000 at age 50 and then eventually hit RM196,800 at the full withdrawal age of 55.

The EPF report also mapped out the current financial life cycle of Malaysians, which began with a very minimum contribution between the ages of 18 to 30.

Contributions increase gradually until the average age of 45, and the increase becomes rapid from then until retirement around 55 years old, after which the savings are slowly depleted.

“Malaysia is fast heading towards becoming an aged nation by 2030, when 14% of the population will be 60 years old and above.

“There is an urgent need to set up a holistic social security framework to streamline all social security programmes in Malaysia,” said Mohd Naim.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3

Next In Nation

Misguided Health Ministry article on sexual harassment comes under fire
Historical token shows Indian community's contribution to the rail sector
Expired social visitor pass holders who can't leave by April 21 can apply for special pass to extend stay, says Home Minister
Benefits of cabotage policy for submarine cable repairs outweigh shortcomings, says shipowners’ association
Upholding Jawi akin to upholding definition of Malays in Constitution, says PM
Wrap up by noon or break your fast here, judge tells Najib's defence
Sabah police to use preventive laws on masterminds behind water, power thefts
Melaka CM says grateful for his year in office
Eateries allowed to open until 6am during Ramadan, says Ismail Sabri
Muslims in Malaysia to begin Ramadan fast on Tuesday (April 13)

Stories You'll Enjoy