KUALA LUMPUR, Feb 10 — About half of Employees Provident Fund (EPF) members have less than RM50,000 in their retirement savings, which translates to only about RM210 a month to sustain their lives over a 20-year period, Retirement Fund Inc (KWAP) chief strategy and services officer Nazaiful Affendi Zainal Abidin said.
Speaking at the Forum Ekonomi Malaysia (FEM) 2026 last Thursday, Nazaiful said the figures reflect a gap between how prepared Malaysians think they are for retirement and their actual savings levels.
“Just a case in point. I think when EPF came up with their Retirement Income Adequacy (RIA) framework, they increased it to RM390,000 from RM240,000.
“If you do the math, RM390,000 translates to about RM1,625 a month, but when I did some of the math, half of EPF members have less than RM50,000, that means you only have close to RM210 a month to sustain your life over a period of 20 years,” Nazaiful said during a discussion on preparing for an ageing nation.
Nazaiful attributed the mismatch largely to what he described as an “optimism bias” among Malaysians who believe they have accumulated sufficient savings for retirement despite data suggesting otherwise.
“I think Malaysians have this optimism bias. Why I say that, they think they have enough when they retire but the numbers do not show that,” he said.
The KWAP official warned that inadequate retirement savings could push many retirees to rely on family members for financial support, a model he said is becoming less sustainable as household sizes shrink and living costs rise.
“So if the current system cannot sustain your life after retiring, then you have to depend on your family to support you. And we all know for a fact, as the country progresses, the family unit becomes smaller, and there’s also the case of cost of living getting higher, and this often mentioned mantra of ‘sandwich generation’, so you are stuck between a rock and a hard place. So that also is not sustainable,” Nazaiful said.
While noting some improvement in financial awareness among Malaysians, Nazaiful said sustained education and early financial planning are still necessary to avoid inadequate retirement income in later life.
“But enough of being an alarmist. I think perhaps it’s also important to recognise the fact that, so far, there is increasing awareness on the part of Malaysians to start to embrace financial planning at a greater level of understanding and that needs to happen and it needs to be repeated and it needs to start from the get go.
“Otherwise, you have an ecosystem that will not be sustainable to support your standard of living after you retire, and even so, the assumption is 20 years. But we all know for the fact that most of us live longer than 20 years,” he said.
Nazaiful said correcting public misperceptions about retirement adequacy is critical, warning that misplaced confidence could influence how Malaysians plan and prepare for their retirement years.
“I would imagine that the need for us to correct this misperception is extremely important because it’s quite dangerous. It will influence the way we plan, the way we prepare ourselves when we move to the golden years,” he said.
