The Employees Provident Fund (EPF) is concerned with the spending habit of some contributors that they run out of their savings too soon after their retirement.
Kuala Lumpur EPF branch Retirement Advisory Service (RAS) officer Nornisah Mohd Yusof said many contributors ran out of their EPF savings within three or five years after their retirement, although the life span for Malaysians has increased to 75 years.
"More worrying are cases where the retirees withdrew 70 percent of their savings and spent the money in less than 30 days," she told Bernama recently.
Therefore, Nornisah advised EPF contributors, especially those going on retirement, to plan their expenditures and manage their finances well, so as not to be left in the lurch during their old age.
"For (EPF) members in need of advice or clarification, they can refer to the RAS officers at the EPF offices nearest to them.
"We will give advice and suggestions to help them make the best decision before they withdraw their EPF savings," she said.
RAS officers can provide advice
She said the RAS officers could also provide advice on managing their savings that would generate monthly income, enabling them to sustain their cost of living throughout their retirement.
Nornisah said EPF contributors would have to have Basic Saving, which is a certain amount based on their age in their Account 1 to enable them to have savings of at least RM228,000 when they reached the age of 55.
The amount is in tandem with the minimum pension in the public sector, which is RM950 a month for 20 years, from the age of 55 to 75.
She said as of last year, 65 percent of EPF contributors aged 54 and below had savings of less than RM50,000.
According to her, there are four age phases for contributors to plan their finance to ensure they have enough money and able to live in comfort after their retirement.
"The first phase is during the 20s, where contributors are highly encouraged to save by allocating their savings for assets, child education and also retirement.
"When they are in their 30s, this will be a suitable time for them to evaluate their job, because at this age, they should afford to make deposit payment for a house.
"This is the best year to plan your retirement, if it has not been done earlier when you are in your 20s," she added.
Nornisah said when members are in their 40s, those with families should focus more on making savings for their children's education and also for their retirement.
They should also re-evaluate management of their credit so as not to be burdened with debts, she added.
She said the last phase is when contributors are in their 50s.
"At this age, members are encouraged to continue with their savings and should not take risks in expanding their wealth."