Every month, a portion of your salary is deducted and placed into your Employees Provident Fund (EPF) so that you have a sum of money to live on when you retire.
But what happens when the amount is found to be lacking and you’re staring at the possibility of working during your sunset years?
Only 36% of M’sians have enough EPF savings for retirement
The alarm was raised by Finance Minister II Datuk Seri Amir Hamzah Azizan, who revealed a troubling figure regarding the number of Malaysians who have sufficient EPF savings for retirement.
Speaking to Astro Awani, he said only around 35% to 36% of Malaysians are expected to have adequate savings to support themselves after retirement.
In light of this, he said the government has taken several measures in addressing the problem such as expanding the use of digital technology.
“If they want to make online transfers, everything can be done easily. When the process is not complicated, people are more inclined to save and increase their savings
“We are working to increase these savings by encouraging individuals to contribute voluntarily and not just rely on salary deductions or employer contributions.
“We are also focusing on certain groups such as those who just started saving up and those in the gig sector, with suitable incentives being provided,” he said.
Aside from that, Amir added that dividing every person’s EPF savings into three separate accounts is another measure implemented by the government to help increase one’s savings.
“Savings are divided into three accounts — one that can be used, one for emergencies, and another that can be utilised to improve quality of life, for instance for buying a house or for education.
“This is one of many efforts we are implementing to improve the current system, so that the money accumulated can work more effectively and provide better returns for contributors.”
GLICs urged to step in and help
Amir also called upon Government-Linked Investment Companies (GLICs) to take on a more proactive role when it comes to exploring new opportunities, given the inevitable shift towards an intellectual capital-based and informal economy.
“This new approach requires a focus on creating opportunities, especially for the self-employed or those venturing into entrepreneurship for the first time.
“If we look at the caregiving sector in Malaysia, it is still in the early stages of development. Not many parties have explored this industry. It actually opens up new opportunities, but because it is still new, not many are willing to invest.
“Therefore, GLICs play an important role in activating this segment more effectively,” he said.
