EPF: Retirees Need RM390,000 For Basic Retirement, RM1.3 Million For Luxury Lifestyle
These benchmarks are a comprehensive monthly expenditure guide to help Malaysians better plan for their retirement.
By Yap Wan Xiang — 12 Dec 2024, 06:05 PM
The Employees Provident Fund (EPF) has announced that Malaysians would need at least RM390,000 in savings to cover essential retirement needs
According to the New Straits Times, those who seek a reasonable standard of living after retirement will require more than RM650,000.
For those aspiring to a luxury lifestyle post-retirement, at least RM1.3 million in savings will be necessary.
EPF explained that these benchmarks are part of its three-tiered Retirement Income Adequacy (RIA) framework, supported by the Belanjawanku Guide. This framework is designed to provide Malaysians with a detailed monthly expenditure guide to better plan their retirement.
These savings targets are designed to support a 20-year monthly withdrawal plan, reflecting Malaysia's average life expectancy, The Malaysian Reserve quoted EPF chief executive officer Ahmad Zulqarnain Onn as saying.
Benchmarks for monthly withdrawals over 20 years:
- Essential Tier (RM390,000):
Monthly withdrawals start at RM1,625 in the first year, with gradual annual increases.
- Reasonable Tier (RM650,000):
Monthly withdrawals begin at RM2,708 in the first year and rise to RM7,389 by the 20th year.
- Luxury Tier (RM1.3 million):
Monthly withdrawals start at RM5,417, growing to RM14,779 by year 20.
The framework will kick off in 2026 to ease the transition to the revised benchmarks
For example, the essential tier will be increased from RM240,000 to RM290,000 by January 2026, RM340,000 by January 2027 and RM390,000 by January 2028.
From 2029 onwards, these benchmarks will be adjusted every three years to account for rising living costs, based on updated Belanjawanku data.
The framework was developed in collaboration with the Social Wellbeing Research Centre (SWRC) at Universiti Malaya, estimating the minimum monthly expenses required for a decent living standard.
