Ahmad Maslan tells how to achieve RM240,000 EPF savings by age 55

Malaysians will need at least RM240,000 in savings when they reach the age of 55, when they are allowed to withdraw from their Employees' Provident Fund (EPF) savings, said Deputy Finance Minister I Ahmad Maslan.

He has come up with two solutions on how to reach this figure, which he said is calculated on the basis that one needs about RM1,000 monthly to survive the next 20 years after withdrawing from EPF, or up to the age of 75, the average lifespan in Malaysia.

Firstly, Ahmad said one could voluntarily add on to the monthly salary deductions that go to their EPF savings.

"We ask ourselves, how much savings do we have now, and how old are we now? Can we reach RM240,000? If we can't, we can add on to the contributions voluntarily," he was quoted as saying by Berita Harian during a visit to the EPF office in Kota Bharu today.

Another solution, Ahmad said, is for Malaysians to work in companies that offer higher salaries, the paper reported.

Earlier this year, Finance Minister Anwar Ibrahim said that as of December last year, only 19% of EPF contributors had savings that would enable them to withdraw RM240,000 when they reached the age of 55.

"This directly shows that 81% of contributors aged 55 and below are in a serious situation where their savings will not be enough for them to retire above the poverty level," he told Parliament in April.

The government has refused any more withdrawals from EPF, following calls for another round of such withdrawals to help those in critical financial situations.

Instead, Anwar announced a plan that would allow contributors to take up loans from a bank with their EPF savings as collateral, a move that was criticised by economists.