Retirement Planning: Work Longer, Save More Or Make Your Money Work Harder?

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Many Malaysians are working hard everyday in order to save up money to provide for themselves and their families. The hope is to one day retire and spend their remaining years relaxing and enjoying themselves with the hard earned money that they have accumulated over decades.

Unfortunately, the harsh reality is that many people are nor currently stressing over the fact that their savings might not be enough to carry them through their retirement. Instead of spending their golden years in peace, Malaysians are worrying if they can even survive past the first few years of their retirement.

Most Malaysians just do not have enough savings

According to the Employees Provident Fund (EPF), retirees will need at least RM240,000 by the age of 55 to support their retirement years. This translates to a minimum stipend of RM1,000 a month for 20 years (55 to 75 years), in line with the country’s life expectancy.

Alarm bells were set off when as of December 2022, it was found that only 30 percent of EPF contributors had savings of more than RM240,000 at 55 years of age. The remaining fail to reach the amount due to, among other things, a severe lack of savings, early retirement withdrawals, and low wages.

According to the 2022 Annual Report released by the Securities Commission Malaysia (SC), most Malaysians do not have enough savings for retirement, even with the private and public avenues available for Malaysians to save and invest for their retirement.

Many not covered by any formal retirement savings system

The formal retirement system only covers about 60% of the workforce. Of these, it has become apparent that most of them are already facing insufficient retirement savings. The recent early withdrawals from EPF and retirement savings to cover cash flow issues during the COVID-19 pandemic have only served to exacerbate the problem.

Meanwhile, the remaining 40% of the workforce are not covered by mandatory savings, a situation which could worsen as more workers embrace self-employment and enter the gig economy.

This should serve as a rallying call to inspire early moves towards more financial and retirement planning, especially among the youths working in the informal sector who have no formal retirement savings. 

Scams, frauds and inflation on the rise

The key to resolving these issues is strict financial planning. Financial experts have identified two key points of focus to ensure financial health: reducing expenses and increasing wealth or income. 

The latter is especially helpful in replenishing savings and helping to secure one’s financial future. However, it is becoming ever more difficult due to a surge of illegitimate offers, fraud cases, and a myriad of well-targeted scams.

Financial planners have also noted that rising inflation rates, higher healthcare costs and longevity, the ability to retire well are all also major concerns that are being faced by the average Malaysian. This means that many Malaysian workers may have to work longer, save more money, or make the money work harder to help better fund their retirement plan.

In order to raise awareness on these issues,  the SC will hold a three-day event in Penang from 26 to 28 May on the importance of financial planning and the prevalence of financial scams.

Under the flagship investor empowerment programme InvestSmart®, the three-day investment empowerment fair aims to give retail investors more confidence to make informed decisions when investing in the capital market. These characteristics and skills are essential for accumulating wealth and saving for a comfortable retirement.

This article is contributed by the Securities Commission Malaysia in conjunction with the Bersama InvestSmart® @Penang 2023 investor education fair taking place this 26 – 28 May 2023 at Queensbay Mall, Penang.
For more information about the InvestSmart® @Penang 2023 event, please visit

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