PETALING JAYA: Workers in Malaysia should set aside at least 10 per cent of their income apart from the Employees Provident Fund (EPF) for their retirement plan, says Financial Planning Association of Malaysia deputy president Tan Beng Wah.
“EPF is only a safety net, it is not a pension for life,” he told reporters after launching Everyone Can Retire Well Conference and Exhibition 2010 yesterday.
Tan said workers cannot blame the EPF “if they ran out of money after retirement because their personal financial well-being is their own responsibility.” “It’s better if employees start the retirement plan when they are in their mid-20s.
When you start early, you always have time on your side and that is a big plus,” he said. According to a research paper prepared by the National Council for Senior Citizens’ Organisation, Malaysia (NACSCOM) in 2007, Malaysia had a population of 1.6 million people above the age of 60 in 2006 and are expected to increase to 3.2 million by 2020 and 6.9 million by 2035.
NACSCOM said when the citizens reached the age of 55, they cannot get loans to start business as banks and finance companies considered them high risk to undertake and even insurance companies would decline to underwrite their policies. A study conducted in 2004 by the Gerontology Institute of Universiti Putra Malaysia found that 66.1 per cent of the senior citizens did not have a regular income.
Tan said existing government policies should be revisited and amended and new laws enacted to better take care of the senior citizens.
“From the financial and retirement planning perspectives, more emphasis must be given to create a higher level of public awareness on the issue. Ignorance is not bliss in this case.
“For everyone to retire comfortably, a lot of thought has to be put into planning.
You possibly cannot wave a magic wand and expect everything to be fine when the time comes,” he added. — Bernama