Liuism,
The term "RM200 saved a month until you retire is only enough for retirement use, roughly based on 5% returns p.a, not inclusive of inflation calculation (that makes your purchase value smaller in future) based on current expenses level"...

Simply means that, if you save RM200 every single month till retirement and this savings of yours generate you 5% per annum (meaning per year), you will be able to only have just enough for your retirement so to say, you do not have to work anymore and is self sufficient to support yourself and you need not need to work again.

However though, the quote also states not inclusive of inflation calculation. Inflation is simply a term coined that means buying power, e.g. the amount of buying power your RM1 is different with the buying power of RM1 in the future. That means, say, RM8million is more than sufficient to retire comfortably today but in the future, RM8million might not actually be enough as generally, prices always INCREASE , hence INFLATION.

So, you will have to keep saving RM200 worth of today's money, in financial terms, it's called, "real" prices, every single month until retirement and all of your investment has to generate you 5% of return a year (on a compounded basis I assume which simply means all of your earnings from your investment is reinvested), you will then have enough for your retirement.

Hope that helps and not serve to confused you more

On a side note though, doesn't our EPF generally save you about that amount but yet it is still not yet enough for most people?

^I do hope you know how to calculate the returns from that policy, if it is after all, any "return".