Nov 11 2025, 01:33 PM
QUOTE(virtualgay @ Nov 10 2025, 01:46 PM)
KUALA LUMPUR: The Employees Provident Fund (EPF) has been central to Malaysia's retirement system, ensuring financial security for workers.
Yet economists warn that longer lifespans, higher healthcare costs, and mounting financial pressures may test its sustainability.
Certified Shariah Advisor (CSA) and Islamic Financial Planner (IFP) Dr Mohamed Hadi Abd Hamid said the EPF's structure must reflect the financial and demographic realities of modern times.
"A sustainable mechanism such as structured monthly payments will help prevent retirees from depleting their savings too quickly.
"It is not only an economic reform but a moral one, ensuring that those who have contributed to the nation's growth can retire with dignity," said Mohamed Hadi.
This evolving challenge has prompted the government to consider a major reform, introducing a monthly pension-style withdrawal scheme under the 13th Malaysia Plan (RMK13).
Announced earlier this year, the proposed scheme would split members' savings into two parts: a flexible portion accessible at age 55 and a dedicated pension component providing monthly payments for life or until the balance is exhausted.
The aim is to create lasting income stability while preserving individual choice.
According to the Ministry of Finance, contributors should ideally have RM240,000 by 55 to receive roughly RM1,700 a month for 20 years.
Yet most Malaysians retire with less than RM50,000, a sum that often lasts only a few years.
To address this, the government is studying a dual-structure model where one portion of EPF savings remains accessible upon retirement, while another is reserved for structured monthly payouts.
Deputy Finance Minister Lim Hui Ying recently clarified that existing members will retain their current rights, with the new structure applying automatically to future contributors while remaining optional for others.
In practice, the model could be flexible enough to suit various retirement goals. For instance, a contributor with RM53,000 at 55 could withdraw RM250 monthly while preserving capital, or RM500 a month for about 12 years.
Meanwhile, for those with RM500,000, monthly payments of RM2,500 could be sustained without eroding the principal entirely.
"This dual structure provides both freedom and stability. It recognises that while some flexibility is necessary, many contributors need a system that protects them from outliving their savings.
"It also nurtures financial discipline, an essential element of retirement security," said INCEIF University Centre of Excellence for Research and Innovation in Islamic Economics (i-RISE) interim director Dr Mohd Zaidi Md Zabri.
By 2040, one in five Malaysians will be aged 60 or older.
Without reform, Mohd Zaidi believes the nation risks a generation of retirees without adequate income, creating heavier social and economic burdens.
"The proposed monthly pension option under RMK13 is therefore not merely an economic initiative.
"It is a national responsibility and a moral commitment to protect workers who have dedicated their lives to building the country," he added.
Life exectancy MalaysiaYet economists warn that longer lifespans, higher healthcare costs, and mounting financial pressures may test its sustainability.
Certified Shariah Advisor (CSA) and Islamic Financial Planner (IFP) Dr Mohamed Hadi Abd Hamid said the EPF's structure must reflect the financial and demographic realities of modern times.
"A sustainable mechanism such as structured monthly payments will help prevent retirees from depleting their savings too quickly.
"It is not only an economic reform but a moral one, ensuring that those who have contributed to the nation's growth can retire with dignity," said Mohamed Hadi.
This evolving challenge has prompted the government to consider a major reform, introducing a monthly pension-style withdrawal scheme under the 13th Malaysia Plan (RMK13).
Announced earlier this year, the proposed scheme would split members' savings into two parts: a flexible portion accessible at age 55 and a dedicated pension component providing monthly payments for life or until the balance is exhausted.
The aim is to create lasting income stability while preserving individual choice.
According to the Ministry of Finance, contributors should ideally have RM240,000 by 55 to receive roughly RM1,700 a month for 20 years.
Yet most Malaysians retire with less than RM50,000, a sum that often lasts only a few years.
To address this, the government is studying a dual-structure model where one portion of EPF savings remains accessible upon retirement, while another is reserved for structured monthly payouts.
Deputy Finance Minister Lim Hui Ying recently clarified that existing members will retain their current rights, with the new structure applying automatically to future contributors while remaining optional for others.
In practice, the model could be flexible enough to suit various retirement goals. For instance, a contributor with RM53,000 at 55 could withdraw RM250 monthly while preserving capital, or RM500 a month for about 12 years.
Meanwhile, for those with RM500,000, monthly payments of RM2,500 could be sustained without eroding the principal entirely.
"This dual structure provides both freedom and stability. It recognises that while some flexibility is necessary, many contributors need a system that protects them from outliving their savings.
"It also nurtures financial discipline, an essential element of retirement security," said INCEIF University Centre of Excellence for Research and Innovation in Islamic Economics (i-RISE) interim director Dr Mohd Zaidi Md Zabri.
By 2040, one in five Malaysians will be aged 60 or older.
Without reform, Mohd Zaidi believes the nation risks a generation of retirees without adequate income, creating heavier social and economic burdens.
"The proposed monthly pension option under RMK13 is therefore not merely an economic initiative.
"It is a national responsibility and a moral commitment to protect workers who have dedicated their lives to building the country," he added.
https://open.dosm.gov.my/dashboard/life-expectancy
Male: 73.1 years
Female: 77.9 years
And 10 years before that, many illness kicks in (Meaning at 63.1 / 67.9 years old)
When can retire, and reach 55 , enjoy your EPF savings. You don't have many years to enjoy
Travel insurance also susah and expensive.
Why work so hard, save money, refuse to spend, and help fund the doctors, biopharma companies.
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