Friday, October 7, 2011

Most EPF payers simply can't afford to retire

Arbibi Ashoy
6 October 2011

There has been much debate about the government proposal to raise the retirement age in the private sector from 55 to 60 with an option to extend retirement to 64.

The shocking part of the whole issue is the reasons for the proposal.

I was horrified to read in the local newspapers that statistics show that three-quarters of EPF contributors retire or are expected to retire at the age of 55 with less than RM50,000 in their EPF account.

This is an insufficient and ridiculous amount of money to retire on. According to Unicef, the life expectancy in Malaysia is 75 years of age.

This means that if a person retires at 55, he has to live off his EPF savings for the next 20 years. This comes to RM200 a month.

Is RM200 per month enough to live on? What if the spouse was not working and relied on her husband?

That would mean RM100 per person per month to live on. Simply absurd.

And the worse part is that the majority of Malaysians are in this category because three-quarters of Malaysians will be retiring on RM200 a month.

I just don't get it. Are our nation's financial planners idiots with no access to calculators?

Could they not foresee this problem? Or are we still living in the past when parents are expected to live off their children?

Society has changed. In the past, everyone got married and had big families.

Nowadays, many people stay single and many people marry but choose to have no children.

Even people with children only have a small number.

So if your son or daughter is not a doctor or engineer, he or she will have difficulty providing for his or her family let alone looking after you on top of it all.

So there is a need for a new perspective or a total rethink on our pension format in Malaysia.

Low wage earners definitely need a higher pay so they can contribute more to their EPF fund.

We don't want to see old folks begging in the streets in the next 10 or 20 years.

Source: Malaysiakini, Letters

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