The Khazanah Research Institute (KRI) said the Employee Provident Fund (EPF) scheme withdrawal initiative during the COVID-19 period has resulted in more than 90% of private sector workers under the age of 30 not having enough savings to retire.
According to EPF estimates, an individual needs to have a minimum of RM35,000 by the age of 30 to achieve a basic retirement savings of RM240,000 by the age of 55.
KRI through the report 'The State of Households 2024: Households and the Pandemic 2019-2022' (SoH 2024) said that EPF members' contribution data from 2019 to 2022 showed that only the top 10% in the age category of 30 years and below had more than RM35,000.
The average savings of the top 10% in 2022 is RM49,061.
He further said, this highlights the issue of the low starting salary structure among those who are starting to enter the job market because they cannot reach the basic EPF contribution for retirement.
It found that those under the age of 30 were less affected by EPF withdrawals during the Covid-19 pandemic because they usually have lower financial commitments in terms of loans and dependents.
They also emphasize that individuals approaching retirement age and beyond may face greater problems such as health and disability risks in addition to depleting their retirement savings.
