In Malaysia, the phenomenon of depleting EPF savings shortly after retirement is becoming increasingly common.
Abdul Rahman Abdullah’s story is a case in point.
At 64 years old, Abdul Rahman, a former manager from the East Coast, has seen his fair share of challenges. After dedicating 27 years of his life to working for a company that sold products directly to consumers, Abdul Rahman made the decision to retire at the age of 57.
However, what he didn’t anticipate was the rapid depletion of his EPF savings. The money amounting to RM750,000, is gone, within just seven years of leaving the workforce.
“I received a retirement sum of RM750,000, comprising RM500,000 from Account 1 and RM250,000 from Account 2,” he shared.
He further commented, “The funds were put towards renovating the house, amounting to approximately RM200,000. This involved erecting a concrete fence and installing a kitchen and garage. Furthermore, I expended an additional RM70,000 on my daughters’ wedding ceremonies in 2016 and 2018. The residual amount was utilized for everyday expenditures like food, utilities, internet, and car fuel throughout my retirement.”
A worrying trend
Abdul Rahman’s story sheds light on the financial strains faced by retirees in Malaysia. His experience underscores the urgent need for reform in Malaysia’s pension and retirement framework.
Recently, Prime Minister Datuk Seri Anwar Ibrahim disclosed that data from the Employees Provident Fund (EPF) reveals that one in four members exhausts their EPF savings within five years after reaching the withdrawal age.
Photo credit: Malay Mail
Speaking at the International Social Well Being Conference (ISWC), Anwar underscored how the lump-sum nature of EPF benefits creates its own challenges. Many Malaysians were left incapable of sustaining a decent standard of living during retirement.
He also highlighted the vulnerability of the elderly population to poverty. Anwar pointed out that merely 29 percent of Malaysians possess a pension or pension-like income upon retirement.
Additionally, he referenced a survey indicating that over 26 percent of respondents aged 60 and above foresee continuing to work. Sadly, they will have to do so until their health declines due to difficulties in securing sufficient retirement income.

Pension reform needed
Proposing a phased approach, Anwar suggested expanding EPF coverage to encompass more of the working-age population. This will allow more Malaysians to accumulate adequate EPF savings over time. Concluding with a call to action, Anwar advocated for significant reform in Malaysia’s pension and retirement system.
“It is time for Malaysia to embrace serious reform in its pension and retirement framework to enhance its coverage, adequacy, and sustainability, and ensure financial security and equity for all Malaysians in their later years and contribute to positive long-term economic growth,” said Anwar.
Related: With EPF Savings Under RM10K, You’re Limited to RM42/month For 20 Years
Related: What You Must Know About EPF’s Significant Restructuring
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