{"id":66290,"date":"2024-12-13T12:50:24","date_gmt":"2024-12-13T04:50:24","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=66290"},"modified":"2024-12-17T17:58:25","modified_gmt":"2024-12-17T09:58:25","slug":"epf-retirement-savings-level-increase","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/epf-retirement-savings-level-increase","title":{"rendered":"EPF Raises Basic Retirement Savings Target To RM390,000"},"content":{"rendered":"

The Employees Provident Fund (EPF) has just raised the basic retirement savings benchmark to RM390,000. The previous guidance was set at RM240,000. The retirement age benchmark has also been raised from the previous 55 to 60.<\/span><\/p>\n

This was revealed at the recent launch of the EPF’s Retirement Income Adequacy (RIA) framework and Belanjawanku 2024\/2025. The RIA framework which will come into effect in 2026, puts focus squarely on the savings and retirement income security.<\/span><\/p>\n

At age 60, RM390,000 is now needed to cover basic expenses in retirement<\/h4>\n

According to a <\/span>statement released by the EPF<\/span><\/a>, the RIA will have a three-tier savings framework anchored on the adequate retirement income as determined by Belanjawanku from time to time.\"\"<\/a> <\/span><\/p>\n

The Belanjawanku guide<\/a> was first developed by both the EPF and the Universiti Malaya Social Wellbeing Research Centre in 2019. It estimates the minimum monthly expenses needed for a decent living standard. <\/span><\/p>\n

When first developed, the guide focused solely on the Klang Valley. However, it has since grown to encompass 11 other major cities in Malaysia.<\/span><\/p>\n

According to the RIA, at current prices, a 60 year old retiree will need approximately RM390,000 to cover essential retirement needs. They will need up to RM650,000 for a reasonable standard of living. Up to RM1.3 million to enjoy greater financial security and quality of life in retirement!<\/span><\/p>\n

Basic savings target to be raised to RM390,000 by 2028<\/h4>\n

The framework is set to begin in 2026. However, the changes to policies anchored on the new RIA framework will take effect gradually over a three year period. <\/span><\/p>\n

The basic savings amount will increase gradually by RM50,000 annually over three years. The aim is to reach the basic savings target of RM390,000 by 2028.<\/span><\/p>\n

\"epf<\/a>

Source: KWSP<\/a><\/em><\/p><\/div>\n

\u00a0Members\u2019 Investment Scheme (MIS)<\/h4>\n

This is to manage the Members’ Investment Scheme (MIS), which allows members to transfer 30 percent\u00a0 of savings above the basic savings amount in Akaun Persaraan.<\/span><\/p>\n

In addition to this, the withdrawal policy for savings above RM1 million will align with the enhanced savings benchmark of RM1.3 million. This offers members more flexibility while managing their surplus funds. Similar to the basic savings level transition, the threshold for this withdrawal will increase gradually by RM100,000 annually over three years.<\/span><\/p>\n

All-in-all, this would mean that a member with more than RM1.1 million will be able to withdraw any excess in 2026.<\/span><\/p>\n

In order to keep up with rising costs and inflation, the RIA savings levels will be reviewed every three years. The next review will be in 2029.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

The retirement age benchmark was also raised to 60 to facilitate retirement income security.<\/p>\n","protected":false},"author":58,"featured_media":50011,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[216,240],"tags":[340,530,982,649,650,2538],"class_list":["post-66290","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-updates","category-retirement-planning","tag-epf","tag-kwsp","tag-news","tag-retirement","tag-retirement-planning","tag-ria"],"acf":[],"yoast_head":"\nEPF Raises Basic Retirement Income Benchmark<\/title>\n<meta name=\"description\" content=\"The EPF has announced that the new retirement age benchmark will be raised to 60, while the retirement savings target will be RM390,000.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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