EPF Savings May Not Suffice For Retirement

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PUTRAJAYA, Nov 10 – Financial planning for retirement is crucial to ensure a comfortable lifestyle. Universiti Utara Malaysia Deputy Vice-Chancellor (Research and Innovation)Prof Dr Noor Azizi Ismail said a retiree, particularly if he is an urbanite needed at least RM1,500 monthly to sustain. He said private sector workers should not totally depend on their Employees Provident Fund (EPF) savings to provide them a comfortable retirement.

“In the next five to 10 years, RM1,500 will not be enough unless they are free of loans or have other savings. There are some, presently, who had taken housing loans with a payment term of up to 70 years,” he told Bernama when contacted. According to EPF last May, only 22% of the 6.7 million active contributors aged 54 years had RM196,800 or more in their savings, which summed up to about RM820 monthly during retirement.

Prof Noor Azizi described the statistics as worrying particularly with regard to health care costs. He said those with insurance may not have a problem but he know there are many who do not have health insurance particularly lower income employees. Private company supervisor Hendri Yanti Zainal Arifin, 32, said for her, a comfortable retirement meant having her own house and adequate savings. She expressed concern for the present youths who are unable to own a home due to escalating house prices.

“It is not inconceivable that many of the youths today will continue to stay in a rented dwelling after they retire, and coupled with the rising cost of living, their EPF savings may not last,” she said. Private college lecturer Khairul Nizam Ahmad Lutfi, 35, said the lower income group would likely be the most affected upon retirement. 

He said a low salary means the EPF contribution is also low. He also said that the savings will not sustain and they may have to get a job again unless they have children who can support them financially. Besides owning a house, he opined, retirees needed to have a saving of at least RM400,000 for a comfortable retirement.  “Thankfully, I could afford to buy my own home when I was in my 20s, but I am still worried that I might not have sufficient savings when I retire,” he said. — Bernama

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