BANGI: The Employees Provident Fund (EPF) is concerned with the spending habits of those who run out of savings too soon after retiring.
Kuala Lumpur EPF branch retirement advisory service (RAS) officer Nornisah Mohd Yusof said many subscribers ran out of their EPF savings within three or five years after retiring although the life span for Malaysians had increased to 75 years.
"More worrying are cases where retirees withdrew 70% of their savings and spent the money in less than 30 days," she told Bernama.
Nornisah advised EPF subscribers, especially those about to retire, to plan their expenditure and manage their finances well, so as not to be left in the lurch during their old age.
"For (EPF) members in need of advise or clarification, they can refer to RAS officers at the EPF offices.
"We will give advice and suggestions to help them make the right choice before they withdraw their EPF savings," she said.
She said RAS officers could also provide advice on managing their savings to generate monthly income, allowing them to sustain their cost of living throughout their retirement.
Nornisah said EPF subscribers would need to have Basic Savings, a certain amount based on their age in their Account 1 to enable them to have savings of at least RM228,000 when they reached the age of 55.
The amount is in tandem with the minimum pension in the public sector, which is RM950 a month for 20 years, from the age of 55 to 75.
She said as of last year, 65% of EPF subscribers aged 54 and below had savings of less than RM50,000,
According to Nornisah, there are four age phases for subscribers to plan their finance to ensure they have enough money and able to live in comfort after their retirement.
"The first phase is during the 20s, where subscribers are highly encouraged to save by allocating their savings for assets, child education and also retirement.
"When they are in their 30s, this will be a suitable time for them to evaluate their job, because at this age, they should be able to make a down payment for a house.
"These are the best years to plan your retirement, if it has not been done earlier when you are in your 20s," she added.
Nornisah said when members are in their 40s, those with families should focus more on making savings for their children's education and also for their retirement.
They should also re-evaluate management of their credit so as not to be burdened with debt, she added.
She said the last phase is when subscribers are in their 50s.
"At this age, members are encouraged to continue with their savings and should not take the risk to expand their wealth. – Bernama