Only 22% of EPF contributors have sufficient savings for retirement

PETALING JAYA: Only 22% of the 6.7 million Employees Provident Fund (EPF) active contributors aged 54 years have sufficient savings of RM196,800 or more to sustain themselves during retirement.
EPF Head of Strategy Management Department Balqais Yusoff said the other 78% of the contributors, unfortunately, did not have the basic amount for their retirement years.
Stating that the retirement reality today was quite sad from EPF's standpoint, she said of the total active EPF contributors, 65% had less than RM50,000 in their savings.
"Based on our definition of basic savings where retirees will need at least RM820 a month in their retirement years, those who have RM50,000 in EPF can go on for five years only before their savings run out.
"That is if they live at RM820 a month. And we know that RM820 is not enough, that amount is probably sufficient for grocery shopping only and that's the reality today," she said.
Balqais said the low salary structure in the country was a major contributor to the situation, where 89% of the working population earn less than RM5,000 which translates into a lower saving rate for the EPF.
"In term of contribution rates in mandatory saving, Malaysia is the world's fifth highest, but the salary structure does not translate into a high savings amount.
"So, we need to constantly review the wage structure and the minimum wage also needs to be aligned with the rising cost of living," she said. – Bernama