IF EPF savings are increasingly insufficient for retirement, it’s worth asking whether the problem lies with withdrawals or with how much Malaysians are actually able to save after meeting the cost of living.
Retirement savings targets have risen, but it’s important to understand why that matters. EPF’s new Retirement Income Adequacy (RIA) Framework sets RM390,000 as the basic target and RM650,000 as an adequate target.
These aren’t arbitrary; they are tied to estimated living costs. Yet most Malaysians still fail to meet even the old target.
Millions still have extremely low balances. In 2023, 6.3 million contributors under 55 had less than RM10,000 saved, meaning expected monthly retirement income would be below RM42, a level that consigns retirees to “poor” status.
Low balances and early withdrawals are symptoms of the same issue. Wages are low, work is insecure, and living costs rise faster than wages and savings. Our system doesn’t just fail the poor. It actively produces retirement poverty.
This matters because sickness and healthcare needs increase after retirement. If people have already drained their EPF just to survive, they will be forced to scrape the barrel when illness hits, even though healthcare is a public responsibility.
So the real question isn’t whether RM390,000 or RM650,000 is “enough.” It’s why such a large share of Malaysians will never even get close under today’s low-wage economy.
That’s why we should start discussing a government-backed retirement safety net, a national retirement fund for those with little or no EPF savings, so people can age with dignity rather than in poverty. – February 4, 2026