An official from the Employees Provident Fund (EPF) had revealed that only 3% of its contributors have enough savings to afford for retirement.
He added that the Covid-19-related withdrawals over the past 2 years had a massive impact on the savings of EPF contributors.
According to Bernama, the EPF Chief Strategy Officer, Nurhisham Hussein said the Covid-19-related withdrawals, namely i-Sinar, i-Lestari and i-Citra, had resulted the savings of many of its members below age 55 reaching critically low levels.
“Even with Covid-19, 80% of Malaysian men and 90% of Malaysian women will reach age 60, while 1 out of 3 men and 2 out of 3 women will reach age 80.”
“We now estimate that only 3% of Malaysians can afford to retire.” he said at the Perdana Fellow Alumni Association Speaker Series webinar yesterday (31 October).
In his presentation, he said that by the end of 2021, there would be 54% of EPF members aged 54 and below having less than RM50,000 in their savings account. He added that majority of those who withdrew their entire EPF savings upon reaching age 55 would use it up within 2 to 3 years.
However, he also said that the Covid-19-related withdrawals were allowed due to extraordinary circumstances.
“We are very sympathetic to the plight of our members and hope that the withdrawals had achieved the intended purpose of helping them financially.”
“Moving forward, the reopening of the economy and the measures announced in Budget 2022 should help relieve the pressure on our members.” he said.
Meanwhile, he said that should there be another round of withdrawal permitted, those who had taken out their EPF savings would now be required to work an extra 4 to 6 years just to cover the amount withdrawn over the past 2 years.
However, it is unlikely that the retirement age will be raised, these members will not have enough for their retirement.
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