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Can We Rely on EPF Savings to Fund for Our Retirement?

Cash overflow from a sack of cash with the word 'retirement'.

Can we rely on EPF savings to fund our retirement years?

Read on my views below.

Can we rely on EPF savings to fund for our retirement years?

According to my reading from The Star Online, it is impossible to do so.

The news, mentioned that 68% of active EPF contributors at age 54 have less than RM50,000 in their EPF accounts.

Considering the current minimum retirement age is 66 years old, this group of contributors only have about 6 more years to increase their savings in their EPF accounts.

With inflation and increasing cost of living, it will be hard for the retiree to enjoy their retirement years.

Add on with the minimum wage of between RM1,100 and RM1,200, depending on the location, how much can we expect from our EPF savings when we retire?

Even though, the total savings of monthly EPF is about 24% (11% from the employee and 13% from the employer, 12% from the employer for those earning more than RM5,000 per month), it is still not sufficient to support our retirement years.

Thus, we cannot rely on EPF savings alone to support our retirement years.

Read more: EPF Self Contribution: Everything you need to know

Some tips to a better retirement

Below, I share some tips on how we can save more for a better retirement:

  • find alternatives to increase our income
  • save a big portion of our monthly income
  • invest our savings so that we can grow our hard-earned money
  • be careful with our money-related matters especially nearing or after retirement

Other than that, I understand you need to help your children through their college years.

But they have many alternatives nowadays. Among them, the most common one is the PTPTN study loan.

Also, I understand you need to help to get a car for your children when they start working.

But they can opt for other alternatives for the first few months until they save enough to buy a car themselves.

In fact, I strongly disagree if you wish to pay for your child’s wedding or down payment or monthly instalment for their home.

Because your retirement savings is for you during your retirement years.

Furthermore, your children still have plenty of time to earn their income.

Other than the above, Malaysian may consider taking part in the Private Retirement Scheme (PRS) as an added fund to support their retirement years.

Final thoughts

Hence, I would like to repeat again, we cannot rely on our EPF savings for our retirement years.

It is never too late to take a good look at your retirement savings and start to plan from there. Stop blaming the situation but take action and be responsible for our own decision.

I hope that my sharing above is beneficial to you.

Lastly, let’s plan and grow our retirement fund.

Read more: 10 reasons why we must have multiple sources of income

photo credit: 401(K) 2013 via photopin cc

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