EPF: Malaysians Need RM600,000 to Retire Comfortably
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Malaysians will require at least RM600,000 to retire comfortably in major cities, according to the Employees Provident Fund (EPF). As a result, EPF has recommended workers to begin saving for retirement and diversify their portfolios. It further stated that EPF provides free guidance on such topics.
Retirees today need RM2,450 per month for essentials
EPF's chief strategy officer Nurhisham Hussein said that based on its statistics, an individual retiring in Kuala Lumpur today would need to set aside RM2,450 per month for basic essentials.
Based on this and statistics from the Statistics Department, which show that the average Malaysian currently lives for 80 years, a person will need RM600,000 to retire.
He stated that the estimates are based on the current economic condition. However, the figures fluctuate depending on various factors, including region and individual purchasing habits.
He said that, for example, if a person retires in Alor Star today, they will need RM1,980 per month based on purchasing the same basic necessities (as a person retiring in Kuala Lumpur). He added that diversifying investments is the key to boosting one's retirement savings.
He advised Malaysians not to put all their eggs in one basket, as numerous options exist, including investing in certified unit trusts and financial organisations.
Nurhisham stated that since Malaysian salaries are among the lowest in the region, EPF has implemented many strategies to help members develop their savings.
For instance, he noted that Malaysians could begin contributing to EPF as young as 14 years old. Their parents can assist them in opening EPF accounts and initiating contributions.
Peak financial stability at 40 to 50
He added that EPF is aware of the high cost of living and that, generally, Malaysians would attain their peak financial stability between the ages of 40 and 50.
He explained that Malaysians typically have higher commitments, such as expensive childcare, medical bills, and financial obligations to direct and extended family members.
According to Nurhisham, contributors must diversify their savings regardless of their financial situation.
He recommends Malaysians not to make any EPF withdrawals after 50 as they would still be working and have a monthly income.
He said that even retirees should only withdraw what they need so that the rest of their money can continue growing.
"EPF pays dividends up to the age of 100. So, let your money grow and only take out what you need," he said.
Free consultation with EPF
He stated that Malaysians are aware that the cost of living is growing and want to increase their savings.
According to him, many individuals who came to EPF for consultations indicated concern and interest in increasing their savings. As a result, EPF has formed an advisory group to assist Malaysians in making sound financial decisions.
EPF's experts can help explain and suggest where Malaysians should put their money if they wish to diversify their investments.
In response to "trading gurus" who have advertised their services on social media, Nurhisham stated that EPF advisers could provide the same advice for free.
Meanwhile, he stated that October is Financial Literacy Month, and the EPF is collaborating with Bank Negara Malaysia, Permodalan Nasional Berhad, and other financial institutions to increase awareness of the importance of saving and financial literacy.
Nurhisham concluded, "When you want to invest, do so only with the money you can afford to lose, and not your crucial savings."
Source: The Sun Daily
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