Retirement is a significant milestone that many look forward to, but it also comes with the pressing question: “How much do I need to retire comfortably in Malaysia?”
According to Employees Provident Fund (EPF), 6.3 million members under 55 years old, or 48%, have less than RM10,000 in their accounts.
Don’t you think this insufficient savings in EPF is at a serious level?
Several factors contribute to these low savings, including:
- Low starting wages
Many enter the workforce with salaries that barely cover the cost of living.
- Minimal annual increments
Salary increases often do not keep pace with inflation.
- Limited prospects for transitioning to higher-paying jobs
Many workers find it challenging to move into higher-paying roles.
If any of these situations resonate with you, it might be time to reassess your retirement plans.
Let’s break it down with a simple calculation. Just by assuming that a person has about 20 years after retirement, with savings of RM10,000 members are expected to live with only RM42 per month! RM42 for basic necessities are just not enough!
So how much do you need to retire comfortably in Malaysia? It is quite subjective but the answer depends on you. This is the estimated monthly budget needed for senior couples and senior singles according to EPF Belanjawanku 2022-2023 Expenditure Guide.
The numbers in the previous graphic may be too much for you. Let’s find out what is the recommendation by EPF.
According to the EPF, Malaysians require at least RM240,000 by the time they hit age 55 to cover basic, everyday needs such as food and everyday costs.
Sadly, based on the data back in 2022, 73% of its members will not be able to meet this requirement. With RM 240,000, you will have RM 1,000 every month to live on. This is by assuming that the average life expectancy of Malaysians is until 75. By factoring in potential medical expenditure, RM1,000 will likely not be sufficient.
What steps should you take now?
Given these figures, it is crucial to start planning for your retirement as early as possible. Establish a stable income, and from there, begin setting aside funds for your future. Remember, it’s never too early—or too late—to start preparing.
So, how ready are you for retirement? Have you taken the necessary steps to secure your financial future? Share your thoughts with me and I am here to help you plan for a brighter future.