Very Few Malaysians Can Afford To Retire. What Went Wrong? | Insight | Full Episode

Between 2020 and 2022, around USD$33 billion was withdrawn from Malaysia’s pension fund, the Employee Provident Fund (EPF), to help mitigate the impact of the COVID-19 pandemic. Now, about half of EPF contributors under the age of 55 have less than MYR10,000 in their accounts. And according to EPF officials, only 4 per cent of Malaysians can afford to retire.

As soaring inflation and the weak ringgit drive up cost of living, the opposition has piled pressure on the government to allow for another round of EPF withdrawals. But Prime Minister Anwar Ibrahim has resisted further drawdowns. Can Malaysians afford to retire? What plans does the government have to replenish the pension fund? Is Malaysia facing a retirement timebomb?

00:00 Introduction
01:11 Why the need to withdraw pensions early?
7:29 Malaysia’s depleted retirement savings
10:41 Inflation and the rising cost of living
13:43 One freelance worker's situation
19:45 Was allowing early pension withdrawals the right move?
23:33 A deeper problem: Malaysians not saving enough
32:15 Can the EPF be replenished?
37:24 What could happen to retiring Malaysians with no savings?
41:13 A race against time to rebuild the EPF

===============
ABOUT THE SHOW: Insight investigates and analyses topical issues that impact Asia and the rest of the world.
==========================
#CNAInsider #CNAInsight #Malaysia #Retirement #Pension

For more, SUBSCRIBE to CNA INSIDER!

Follow CNA INSIDER on:

[CatsCutelover]

the salary is same like 10 years before, but the living cost keep increasing

[sitechca]

When I visited Malaysia, I saw people from all walks of life queing up for RM100 durians, many youths queing up for RM20 drinks. It seemed like Malaysians are earning ringgit but spending US dollars on non-food items. Story books at RM70, can of grease at RM40, car tire replacement RM400, RM20 drinks. These are all US prices when converted. It's a wonder then how Malaysians can afford things but yet I saw tons of Malaysians spending like they're rich everywhere. It's a mystery to me.

[_K_]

"Nak beli susu pun takde duit, jadi nak buat mcm mana?" ← Cari income lebih la pakcik, takkan nak harap bantuan cash je memanjang. "Why think about future when we are dying now" ← Pakcik, kau susah sekarang ni sebab kau tak fikir masa depan. Gaji kau dulu 8k semua lesap, ada hati nak kata buat apa fikir masa depan.

What went wrong? Very simple: Malaysians grew dependent on bantuan, cash aids, handouts, subsidy. Hanya tau nangis bila susah, mohon simpati.

Bukan nak kerja keras, tapi nak emosi. Buktinya, ramai yg akan tak puas hati when I say these facts. Emosi lebih2, nangis, jerit, mengamuk.

[edinawi]

The main problem in Malaysia is our lack of financial literacy. During MCO our company was paying wages at usual time at usual rate. A big percentage of my colleagues decided to withdraw from EPF and use it to buy luxury goods. The general excuse is that its their money and they can do as they please with it. Its worrying as some of those categorised as B40 actually drank venti Starbucks daily. Most Malaysian suffered hardship due to poor financial planning and indulging in their wants. I try to educate my staff through my own actions. For example I bought coffee pods instead of buying overpriced lattes, I initiated weekly group lunch in pantry by cooking rice in office and bringing lauk to share. This is my effort educate people on how with minimal efforts you could always change your lifestyle and save more.

[scottsleo]

I am a retiree, before I marched into my retirement age, I was thrifty to make sure that I do not overspend my retirement fund. I do not buy expensive goods and I do not eat at expensive restaurants, I make my own coffee at home, yet I can feel the inflation pressure on goods and services. However, what I witness among the youngs in Malaysia is, they are very generous in spending, new cars everywhere on the street, if there is a new car model launching, you can hear waiting time for a new car is 6 months to a year! Similarly, young people are queuing up in front of expensive restaurants for food, branded goods are selling like hot cakes among the youngs.... I am wondering, where do these young people get their money to pay for the luxurious goods and services? I have asked a few young people, they said they have a few credit cards, so they can roll their debts over and sad to see this phenomenon in Malaysia!

[mrblurblur]

At 75 I still have to work to support mahself. My children are finding it hard to make ends meet to support their parents. Retirement is a far fetch word.

[kortyEdna]

Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.

[monofootballacademy]

As Thai people who went to Malaysia several time since I was 9 years old. I remember the first time I came Malaysia in 1986, the country so much develop far beyond Thailand. But after series of visit I can feel the country still the same while Thailand grow up. And from the last visit year ago I can say Thailand start to leave them behind that remind me about Rabbit and Turtle's tale. Please don't get me wrong but the point is wondering what is going on

[fabianmok]

As a Malaysian, i dont like to blame just one party. I think everyone has a part in why this happened. The government kept pandering and listening to the demands of the people, which is not bad if moderated. but some of the welfare given was excessive. Surplus liquidity was shared when saving and paying down public debt was more beneficial, especially those petroleum heydays. Alot of policies were good like healthcare and scholarships. The student loans given were a great idea but giving discounts for payees was a political move to entice voters. On the other hand, whether Muslim or non Muslims Malaysians were a mixed bunch. Some desperately poor groups needed help but were not given for a variety or reasons while some rich well connected groups benefitted from government policies and handouts for purposes of vote buying. The most dangerous trend is increased borrowing from Malaysians, whether they were graduates or white collar professionals. Even doctors and lawyers were living on borrowed cash, the situation is scary.

[joannang]

Me as a malaysian dont come from rich family. Din go overseas for studies. Work & study for my professional course. Work hard when i was young. Think we should not always blame others. Dont spend when u cant afford.

[nitromegamer]

I am a gen z that is well aware of this problem.. currently just started working with RM 2~3K per month, right now I'm just trying to save as much and decrease my spending as little as possible (have to pay my college debt as well..), seeing that uncle with a wage of 8k still falls into such state just hits the reality even worse.

All we can do is pray that we have enough for any emergencies, god forbid getting any health issues upon yourself..

Many private & Public companies in Malaysia including GLCs are paying ridiculous wages and perks to CEOs and Directors (mainly politicians} while paying peanut to the rest of their ordinary staff. It is not only unfair but had increased the gap between the rich and poor.

[DanielHYNg]

I feel sad looking at how people poorly manage their finance. It's actually a retirement timebomb.

[oldtechie]

Sukhvinder is a good man. He has my respect. I wish him all the best.

[ibrahimalli]

If you focus on KL or urban areas in West Malaysia, you would come to that conclusion. But not for the rest of Malaysia. We are not filthy rich like Singaporeans but we are doing just fine. Most of us own landed properties or have our own land to build house. It is just a matter of how we spend our money and our will to survive. Our elders are well taken care of by the community. Our kampung spirit is still strong and we won't allow anyone in our kampung to starve. So far no one in my kampung has to starve because of financial problem. If we measure wealth based solely on cash we have, by definition, we are poor. But, are we really poor, if we have land, cultivate our own crops and catch our own fish etc? For the retirement thingy, the community should take care of each other. Not that we don't have to plan for retirement but we as community at large should play our part too.

[manchu-qumw]

Corruptions is the main factors that is to blame. Poor governance for the country interests and greedy mentality of the politicians becomes the norm. Sad that a country with rich resources and manpower cannot see any economy progress. Anwar is the only hope, but a tough uphill task in hand. I wish and hope that all the corrupted billions can be recovered and jail those greedy ministers, from the top down.

[princepsionic]

Thank you CNA insider who concerns about Malaysia low salary yet High living expenses, thats why many of us sacrificed or are forced to work in our neighbor country : Singapore 😢😭

[raidenneo]

Untuk saya, orang Indonesia, juga sama susah nya menabung duit, tapi saya mulai belajar strategi, untuk menabung dengan goal atau tujuan untuk mengcover pengeluaran selama paling tidak 6 bulan, kalau tujuan sudah tercapai, lanjutkan saja terus dengan goal yang sama, jadi jangan dipikirkan dulu untuk retirement atau pensiun, yang penting menyimpan duit harus ada tujuannya. Ya memang orang kecil seperti kita ini, memang harus mengencangkan sabuk, untuk menyimpan duit, tapi memang kita ini hidup juga cuma untuk memenuhi kebutuhan yang benar benar perlu saja, dan yang tidak perlu, itulah yang bisa disimpan atau ditabung.

[darwis]

Speaking as a college student, when the government handed out RM150 to every undergraduate age 18-20 in last August, all my friends spent all of it in matter of days, that speaks volumes really, saving money is unfortunately such a foreign concept with Malaysians nowadays.

[Underdog]

The only solution is you do not retire. Work as long as you are still able and breathing. You may change to a job that an aged person can handle. It's harsh but it's reality.