Cover image via New Straits Times & Billion Lim/AFP
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About half of the Employees Provident Fund (EPF) members have less than RM50,000 in their retirement savings
This amounts to roughly RM210 a month if spread over 20 years, according to Retirement Fund Inc (KWAP) chief strategy and services officer Nazaiful Affendi Zainal Abidin.
Speaking at the Forum Ekonomi Malaysia (FEM) 2026 last Thursday, 5 February, Nazaiful said the figure highlights the mismatch largely driven by what he described as an "optimism bias", where Malaysians believe they are financially ready for retirement, even when the numbers suggest otherwise.
"I think Malaysians have this optimism bias. Why I say that, they think they have enough when they retire, but the numbers do not show that," he said.
He pointed to EPF's updated Retirement Income Adequacy (RIA) framework as an example of how retirement expectations have shifted in recent years.
"Just a case in point. I think when EPF came up with their RIA framework, they increased it to RM390,000 from RM240,000," Nazaiful said during the forum.
"If you do the math, RM390,000 translates to about RM1,625 a month, but when I did some of the math, half of the EPF members have less than RM50,000, which means you only have close to RM210 a month to sustain your life over a period of 20 years."
As a result, insufficient retirement savings could eventually force more retirees to rely on their families for financial support
According to Nazaiful, this model is becoming increasingly fragile as household sizes shrink and living costs continue to rise.
"So if the current system cannot sustain your life after retiring, then you have to depend on your family to support you.
"And we all know for a fact, as the country progresses, the family unit becomes smaller, and there's also the case of cost of living getting higher, and this often mentioned mantra of 'sandwich generation', so you are stuck between a rock and a hard place. So that also is not sustainable," he said.
While acknowledging some progress in financial awareness among Malaysians, Nazaiful said education and early planning must be continuously reinforced to prevent inadequate retirement income later in life.
"But enough of being an alarmist. I think perhaps it's also important to recognise the fact that, so far, there is increasing awareness on the part of Malaysians to start to embrace financial planning at a greater level of understanding, and that needs to happen, and it needs to be repeated, and it needs to start from the get-go," he added.
"Otherwise, you have an ecosystem that will not be sustainable to support your standard of living after you retire, and even so, the assumption is 20 years. But we all know for a fact that most of us live longer than 20 years."
Nazaiful added that correcting public misperceptions around retirement adequacy is crucial
He warned that misplaced confidence could shape how Malaysians plan — or fail to plan — for their later years.
"I would imagine that the need for us to correct this misperception is extremely important because it's quite dangerous. It will influence the way we plan, the way we prepare ourselves when we move to the golden years," he said.
