64-Year-Old Retiree Shares How He Drained His RM750,000 EPF Savings In Just 7 Years
He retired at 57.
By Sadho Ram — 06 Jun 2024, 10:24 AM — Updated 7 months ago
A 64-year-old retiree's story of how he exhausted his entire retirement savings of RM750,000 within seven years of retiring from his post as a manager highlights the challenges faced by many retirees in Malaysia
Speaking to Sinar Harian, Abdul Rahman Abdullah shared that his entire Employees Provident Fund (EPF) savings were depleted, barely seven years after he retired from a direct selling company on the East Coast in 2017.
According to Abdul Rahman, he retired at 57 after working for 27 years with the company, having accumulated RM500,000 in his EPF Account 1 and RM250,000 in Account 2.
The retiree said two of his largest expenses included spending RM200,000 on house renovations and another RM70,000 on the wedding ceremonies of two of his daughters, one in 2016 and the other in 2018.
He noted that he renovated the house to ensure the comfort of his married children whenever they return home for the festive seasons
He shared that despite no longer working, he still needed to cover his daily expenses.
According to him, the high cost of living and expensive prices of goods didn't help either.
Every time I go out to buy groceries, I need at least RM100 or more.
Now, his wife's pension helps pay for their current expenses
He expressed gratitude towards his 62-year-old wife, who is a retired civil servant.
As she receives a pension, the retired couple now relies on it to help support their expenses in old age.
He also advised retirees to be thrifty so that they don't end up depleting their EPF savings in a short period.
Recently, it was reported that one in four EPF member in Malaysia depletes their entire life savings within five years after retirement
The data was shared by Prime Minister Datuk Seri Anwar Ibrahim, who said that the lump-sum nature of the EPF benefit often leads retirees to spend it quickly, leaving them without enough to cover their living expenses for their entire retirement. This trend results in a decline in their standard of living, reported the New Straits Times.
Anwar, who is also the finance minister, highlighted that the lack of a reliable income source for most retirees leaves them vulnerable to poverty, especially when compared to the average Malaysian population.
Only 29% of Malaysians have a pension or pension-like income during retirement, he said.
Echoing Anwar's concerns, Retirement Fund (Incorporated) chief executive officer Datuk Nik Amlizan Mohamed stated that Malaysia should consider raising the retirement age as people's lifespans become longer
"Perhaps now is a very pertinent time for us to start re-evaluating the retirement age [from 60 years old currently]. When I was small, 50 years old was [considered] old, but that's no longer the case," she said.
According to Nik Amlizan, Malaysia's life expectancy was 57 years in 1960, but now it is 75 years.
"So I think that number or that expected requirement needs to be built into our [retirement] planning. Are we prepared, looking at possibly our children living up to the age of 100?" she asked, as reported by The Edge.
Earlier last month, a Malaysian man shared how his friend spent all of his EPF savings within three years of retirement:
Meanwhile, a Malaysian recently shared how a friend of his managed to save RM1 million in his EPF account by the age of 45: