Bleak retirement looms for many Malaysians

Report finds many workers poorly prepared, with EPF well below needed amounts

- Hazlin Hassan

KUALA LUMPUR – Freelance writer Nadrah Hizwan is 29, but already thinking about her retirement funds.

She paused regular contributions to the Employees Provident Fund (EPF) after going freelance two years ago to take care of her young son, but tries to make contributions every few months or so.

“I am not too stressed yet because retirement still feels far off,” the former academic editor told The Straits Times. She hopes to be able to return to full-time work soon to boost her retirement savings.

To date, she has around RM38,000 (S$11,600) accumulated in her EPF account, as well as additional funds in a government-backed unit trust and a pilgrimage fund.

However, Ms Nadrah is among the minority when it comes to planning ahead. A recent report by the Khazanah Research Institute (KRI) reveals a worrying trend of many EPF members being poorly prepared for retirement.

The Malaysian retirement fund, which is similar to Singapore’s Central Provident Fund, manages the compulsory savings plan and retirement planning for workers in the country.

More than 90 per cent of these EPF members, aged 30 and below, will not have enough basic savings of at least RM240,000 needed to retire comfortably when they reach 55, according to the report that was released in September.

Individuals need at least RM35,000 saved by the age of 30 to meet this retirement goal. But most people under 30 have not met this benchmark, states the report.