Malaysians will need to be millionaires to retire comfortably in 20 years: Report
Published on: Friday, September 23, 2022
By: Malay Mail
An EPF official says over half of EPF contributors, or 56 per cent, around 54-years-old currently have less than RM50,000 in their accounts. (Bernama pic)
Kuala Lumpur: Malaysians who plan to retire in 20 to 30 years from now will need to have a nest fund of between RM900,000 and RM1 million if they wish to live the rest of their lives comfortably, according to the chief strategy officer of the Employees Provident Fund (EPF).
Nurhisham Hussein said the amount would be the “bare minimum” after accounting for inflation and medical expenses, among others, The Star reported today.
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He also said those planning to stop working in the near future would need at least RM600,000 in their savings to have a “dignified” retirement in Kuala Lumpur.
“When you look at the RM600,000 savings threshold, only about 4 per cent of Malaysians could afford to retire.
“It is a little lower outside of the Klang Valley,” he was quoted as saying.
Citing from EPF data, he added that Alor Setar in Kedah is the cheapest place in the country to retire in comfort.
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According to Nurhisham, RM600,000 will only cover basic outpatient medical visits and not major treatment.
He said a retiree will still need to have RM480,000 in savings, noting that it is double the amount for what constitutes the basic thresholds for retirement savings.
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Nurhisham told the newspaper that over half of EPF contributors, or 56 per cent, around 54-years-old currently have less than RM50,000 in their accounts.
He said this amount could last them roughly four years at the current rate.
Nurhisham also reportedly said that about 52 per cent of EPF’s contributors have less than RM10,000 in their accounts, while 27 per cent have less than RM1,000.
“That’s rather worrying. Obviously I think the withdrawals have had a significant impact on retirement adequacy,” he was quoted saying.
Nurhisham appeared to be referring to several schemes in the past two years since the Covid-19 pandemic that allowed EPF members to withdraw money meant for their retirement.
Deputy Finance Minister Datuk Mohd Shahar Abdullah has been reported saying that RM145 billion was withdrawn by EPF members under the four schemes dubbed i-Sinar, i-Lestari, i-Citra and a recent special withdrawal with RM10,000 cap.
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