[SPONSORED] Retirement in Malaysia – Will You Fight or Flight?

Earlier this month, I was contacted by CompareHero, who wanted my opinion on retirement in Malaysia. This is what I said:

“Not being able to afford retirement is scary to me. I can’t imagine how unbelievably stuck that must feel. I don’t want to be 60 and in pain but have to push myself to go to work every single day just to be able to pay for medical bills.

This is why I am a big fan of EPF, PRS and achieving financial freedom. And if the maths say I must start now, in my 20s, then I guess I must start now. Maths doesn’t lie!”

Link to original article.

Here are some things that I learned from the article.

EPF Basic Savings for retirement has increased from RM196,800 to RM228,000

According to the latest revision in 2014, to take info account higher cost of living and longer life expectancy, the amount that an individual now need in their EPF Basic Savings is now RM228,000.

You can benchmark your EPF savings progress

RM228,000 at 55 years old feels like a long time away, but you can check your progress towards this amount based on the image below.

Check your EPF statement (I know some places have that easy EPF printers where it’ll print out your statement with just IC). Are you on track?

The easiest way to keep on track is to maintain 11% deduction instead of 8%. The difference is pretty big – see example below with RM3500 monthly salary.

Most people don’t have enough EPF savings

The current statistics about Malaysians’ average savings are quite sad. According to the image below, only 1 in 5 of you will have enough savings to retire (but only enough to last 5 years! Assuming you retire at 55 and live until 75 years old – the average Malaysians’ life expectancy – you only have enough money for 5 out of 20 years).

Significantly, almost 7 out of 10 Malaysians over the age of 54 years old have less than RM50000 in savings. Assuming RM1000 a month, that will last just slightly over 4 years!

Are you on track to retire comfortably in Malaysia? Go to the original article and find out if you can actually survive on RM1000 a month and how EPF works.

This article was written in collaboration with CompareHero. To stay up to date with the latest news on personal finance in Malaysia, please follow CompareHero Facebook Page.