Malaysians who are looking to retire comfortably in 20 to 30 years should have at least RM900,000 to RM1 million in their bank account, says Employees Provident Fund (EPF) chief strategy officer Nurhisham Hussein.
Speaking to The Star, Nurhisham said this amount is the bare minimum to live comfortably in the country’s capital, Kuala Lumpur.
As for those who are retiring soon, they would need at least RM600,000 in savings.
Meanwhile, Nurhisham said if one is looking for a more affordable retirement outside of Klang Valley, they would need about RM480,000 in the cheapest location of Alor Setar, Kedah.
He said these estimates had factored in inflation and ordinary outpatient medical needs or visits to general practitioners, but not any major medical needs.
He said that unfortunately, the data now shows that only about 4% of Malaysians have enough savings to afford retirement.
According to Nurhisham, about 56% of contributors have less than RM50,000 in their retirement accounts. In normal circumstances, this can only sustain for a little over four years, assuming that their expenses amount to RM1,000 a month.
On the other hand, about 52% EPF members have less than RM10,000 in their accounts while about 27% have less than RM1,000.
“That’s rather worrying. Obviously I think the withdrawals have had a significant impact on retirement adequacy,” he said.
Nurhisham said the several rounds of special withdrawal schemes amid the Covid-19 pandemic have caused the number of members who met the basic requirement savings to drop from 22% to 14%.
Last month, Deputy Finance Minister I Datuk Mohd Shahar Abdullah told the Dewan Negara that the level of EPF members’ savings was very low and worrying after RM145 billion was withdrawn due to the special withdrawal schemes implemented during the COVID-19 pandemic.
Meanwhile, a survey conducted by insurance company Sun Life Malaysia found that 4% of respondents say they no longer have enough money in their EPF accounts to make a withdrawal.