Retirement benchmark feels like distant goal for most M\u2019sians<\/a><\/p>\nStarting this year, the EPF\u2019s Retirement Income Adequacy (RIA) framework will introduce a three-tier savings framework \u2013 adequate savings (RM650,000), basic savings (RM390,000) and enhanced savings (RM1.3mil).<\/p>\n
He said it is important for Millennials and Gen Z to start planning for retirement early, as a majority of Malaysians do not have RM1.3mil in savings when the time comes.\u00a0<\/p>\n
\u201cMany rely on EPF and find that their money runs out much sooner than expected.\u00a0<\/p>\n
\u201cThis shows that while EPF remains a strong foundation, it is unlikely to be enough on its own for younger generations who will live longer and face higher costs in future,\u201d he said.\u00a0<\/p>\n
He said it is still not too late for those in the 40-year-old age group to make a change, as they still can achieve an adequate savings of RM650,000 by age 65 if they have worked for another 25 years under the same scenario.\u00a0<\/p>\n
According to Lau, adequate savings would support monthly withdrawals of RM2,708 in the first year of retirement, potentially rising to RM7,389 by the 20th year of retirement.\u00a0<\/p>\n
Financial literacy advocate Amy Seok said for those under the age of 40, the most effective approach is to ensure consistent savings in their EPF accounts.\u00a0<\/p>\n
\u201cThis includes maintaining continuous EPF contributions, making voluntary top-ups whenever possible, and avoiding premature withdrawals except in genuine emergencies,\u201d she added.\u00a0<\/p>\n
Beyond EPF sayings, Seok said Malaysians should also inculcate the basic habit of long-term investing such as unit trusts, private retirement schemes (PRS), or diversified portfolios aligned with their risk tolerance.\u00a0<\/p>\n
\u201cJust as important, managing lifestyle inflation, reducing unnecessary debt and improving financial literacy are critical foundations for sustainable retirement planning,\u201d she added.\u00a0<\/p>\n
Seok said many EPF members retire with inadequate savings due to not just income levels, but poor financial behaviour, career interruptions, informal employment and early withdrawals.\u00a0<\/p>\n
\u201cThe RIA framework is therefore an important policy signal to prompt earlier intervention, better education, and shared responsibility between individuals, employers and policymakers,\u201d she said.\u00a0<\/p>\n
Areca Capital executive \u00addirector and chief executive officer Danny Wong Teck Meng suggested Malaysians look for a secondary source of income such as part-time work or legitimate investment schemes to boost their retirement savings.\u00a0<\/p>\n
\u201cFor the younger generation, don\u2019t spend so much, invest the money for a better lifestyle in future.\u00a0<\/p>\n
\u201cThe younger generation may not see this because they don\u2019t have the investment habit and that is why we have to cultivate this,\u201d he said.\u00a0<\/p>\n
Prof Dr Balakrishnan Parasuraman from Universiti Malaysia Kelantan (UMK) \u00adsuggested the government gradually raise the retirement age to 62, \u00adciting a study he did several years back found that retiring at the age of 60 is too early.\u00a0<\/p>\n
\u201cFrom that study, we concluded that our lifestyle will be improved. So, 60 is too early to retire.<\/p>\n
\u201cThis is due to longer life expectancy, better access to health and lifestyle changes,\u201d said the human resources and industrial relations expert.<\/p>\n
\u201cAs such, a holistic approach must be considered when it comes to increasing the retirement age.\u201d<\/p>\n
According to the fund, the RIA framework states that a person falling under the \u201cadequate \u00adsavings\u201d tier, which will provide for a reasonable standard of \u00adliving, must have at least RM650,000 in \u00adsavings.\u00a0<\/p>\n
This is based on the RM2,690 monthly income recommended in Belanjawanku 2024\/2025 and it enables monthly withdrawals starting at RM2,708 in year one of retirement.\u00a0<\/p>\n
For the lower tier \u201cbasic \u00adsavings\u201d, a person must have RM390,000, which is 60% of the adequate savings amount, in order to cover essential retirement needs.<\/p>\n
The higher tier \u201cenhanced savings\u201d, which provides a more comfortable retirement, must have more than RM1.3mil, which is two times the adequate savings sum.<\/p>\n","protected":false},"excerpt":{"rendered":"PETALING JAYA: Having at least RM1.3mil in retirement savings might be a challenge for most Malaysians, but experts…\n","protected":false},"author":2,"featured_media":411256,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,217550,217551,186,6700,217553,171097,184,185,12869,17822,217554,217549,217552],"class_list":["post-411255","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-au","tag-australia","tag-business","tag-disciplined-savings","tag-epf-contributions","tag-finance","tag-financial-literacy","tag-investment-habits","tag-malaysians","tag-personal-finance","tag-personalfinance","tag-retirement-age","tag-retirement-savings","tag-ria-framework","tag-rm1-3mil","tag-second-income"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/411255","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=411255"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/411255\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/411256"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=411255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=411255"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=411255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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