A 64-year-old retiree’s experience of depleting his RM750,000 retirement savings in just seven years after leaving his managerial position sheds light on the financial challenges faced by many retirees in Malaysia.

In an interview with Sinar Harian, Abdul Rahman Abdullah revealed that his entire Employees Provident Fund (EPF) savings were exhausted just seven years after he retired from a direct selling company on the East Coast in 2017.

Abdul Rahman, who retired at 57 after 27 years with the company, had accumulated RM500,000 in his EPF Account 1 and RM250,000 in Account 2. He explained that two of his biggest expenses were RM200,000 on home renovations and RM70,000 for the weddings of his two daughters, held in 2016 and 2018.

He said he renovated the house to ensure his married children would be comfortable when they visit for festive celebrations.

Despite being retired, he still had to cover daily expenses, and the high cost of living and rising prices only added to his financial strain. Now, he and his wife rely on her pension, for which he expressed gratitude. His wife, 62, is a retired civil servant, and her pension helps them manage their expenses.

Abdul Rahman also advised retirees to practice thrift to avoid quickly depleting their EPF savings.

This issue has broader relevance, as it was recently reported that one in four EPF members in Malaysia depletes their entire savings within five years of retirement. Prime Minister Datuk Seri Anwar Ibrahim explained that the lump-sum nature of EPF payouts often leads retirees to spend the money quickly, leaving them without sufficient funds for the rest of their retirement. This, in turn, lowers their standard of living.

Anwar, who also serves as finance minister, emphasized that most retirees lack a stable income source, making them vulnerable to poverty compared to the average population. He pointed out that only 29% of Malaysians have pension-like income during retirement.

Supporting Anwar's concerns, Retirement Fund (Incorporated) CEO Datuk Nik Amlizan Mohamed suggested that Malaysia should consider raising the retirement age in response to increasing life expectancy. She noted that life expectancy in Malaysia has risen from 57 years in 1960 to 75 years today, and that retirement planning should reflect the possibility of people living up to 100 years.