EPF Savings Unable To Sustain Retirement

A recent survey showed a 50 per cent drop in Malaysian having faith that their Employee Provident Fund (EPF) savings will hold them in their retirement years. Only 15 per cent of Malaysians sampled in this latest survey believe their EPF savings can sustain them in their old age - a stark contrast to the 30 per cent rate last year. 

Contributing to these factors are the government’s policies that allowed Malaysia to withdraw money from their savings account during the two years Malaysia was struggling to control the Covid-19 pandemic. Plans like the I-Lestari which allowed RM500 monthly withdrawals for 12 months, I-Sinar which allowed withdrawals up to RM10,000 and i-Citra where eligible members are allowed to withdraw up to a maximum of RM5,000 subject to the total combined balance in both Account 1 and 2, have contributed to this lack of retirement savings.

52 per cent of those surveyed said they can’t survive more than three months without a job, 44 per cent said they spent more money than their earnings while 76 per cent felt they were still in control of their cash flow. There’s also been an increase of two per cent to 21 per cent this year for individuals who cannot save any money by month’s end based on the salaries they are earning.

Youth are not scoring high on managing their finances. They may be digitally savvy but savings wise the scope is poor. Two years battling the pandemic - Malaysian’s have realized the need for an emergency fund. The fact Malaysian’s have been dipping into their EPF savings means they have stopped believing that EPF can sustain them in their old age.