Cover image via Bernama & New Straits Times
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New data released by the Employees Provident Fund (EPF) shows that only a small fraction of its members are on track to accumulate enough savings for a financially secure retirement
According to the fund's latest figures, just 10.2% of active Malaysian formal-sector members are projected to reach RM1.3 million in retirement savings by age 60, the amount defined by EPF as the 'Enhanced Savings' benchmark.
The data indicates that the vast majority of members are still falling short of that target, with most struggling to meet lower savings thresholds.
The data shows that most members are not on track for minimum retirement savings
EPF's figures show that only 39.5% of active members have accumulated savings that put them on course to reach the 'Basic Savings' benchmark of RM390,000 by age 60.
When the threshold is raised to 'Adequate Savings' of RM650,000, that number drops to 28.2%.
These figures mean that about six in 10 active EPF members are currently not on track to meet even the minimum savings level intended to cover basic living expenses in retirement.
The situation is particularly concerning for members approaching retirement age.
Among those aged 56 to 60, only 21.5% are on track to reach the 'Basic Savings' level, which is RM390,000, while just 5.2% are projected to achieve the RM1.3 million 'Enhanced Savings' benchmark.
This group is typically in the final phase of building their retirement funds, leaving them with limited time to make significant improvements to their savings.
Younger workers are performing slightly better when measured against the basic savings target
Among members aged 31 to 40, about 40.6% are on track to reach the 'Basic Savings' threshold. The 41-to-50 age group performs slightly better at 42.6%.
However, the overall picture remains concerning. In every age group, the majority of workers are still not saving enough for retirement.
For the youngest cohort aged 18 to 30, only 13% are currently on track to reach the RM1.3 million 'Enhanced Savings' target. This means the remaining 87% are not projected to achieve that level, highlighting the long-term challenge many workers face amid rising living costs.
EPF introduced a three-tier retirement savings framework to help members understand how much they should aim to accumulate before retiring
The tiers are:
- Basic Savings (RM390,000) — meant to cover minimum living expenses in retirement
- Adequate Savings (RM650,000) — intended to support a more comfortable standard of living
- Enhanced Savings (RM1.3 million) — a level aimed at allowing retirees to maintain financial security without major constraints
The latest data comes shortly after EPF announced a 6.15% dividend for 2025, a return considered strong compared with many retirement funds
However, higher dividend returns alone may not be enough to close the retirement savings gap, especially for lower-income workers whose smaller monthly contributions limit the effects of long-term compounding.
As a result, policymakers and financial planners have increasingly highlighted the need for broader measures to strengthen retirement preparedness, including improved financial literacy among Malaysians.
