PETALING JAYA: Everybody wants to enjoy their golden years free of financial worries but the vast majority of Malaysians will never come close to it, a recently concluded survey shows.
According to Nurhisham Hussein, chief strategy officer at EPF, one would need at least RM1 million stashed away to live a worry-free retirement.
But the survey, by fund management company StashAway Malaysia, shows that only 7% of Malaysians will have that sum of money in their EPF account by the time they call it a day.
More worrying is the fact that 45% of Malaysians will not even have RM100,000 in savings upon retirement, which is less than half of the RM240,000 threshold set by EPF.
One would need that sum in the nest egg to have just RM1,000 of spending money every month, which is still below the minimum wage of RM1,500.
A little better off are the 38% who will likely have up to RM500,000 in the bank upon retirement while those who will have RM500,000 to RM1 million upon retirement account for another 8% of the participants.
The survey also shows that 48% of the 272 respondents expect to rely on their future savings for up to 20 years after they clock out.
But at the other end of the spectrum, a total of 51% of those covered in the survey expect to use up all their savings in less than a year.
Ironically, 87% of participants expressed confidence that they would have enough money to live comfortably when they retire.
There are ways to boost one’s retirement savings and many Malaysians are well aware of the many options available.
A total of 43% of those surveyed said they would consider investing their money where they can get returns of 5% or more.
For those who are still struggling to build up a decent-sized retirement fund, investing can be a viable option.
Under the EPF members investment scheme, the contributor has the option to allocate up to 30% of his savings in various investment funds that could offer higher returns.
According to StashAway, this could be a safeguard against inflation, which is a critical factor for long-term retirement planning.
“Moreover, diversification through these funds can substantially mitigate investment risks,” it added in a statement.