Charles Santiago noted that EPF’s retirement income adequacy framework sets RM390,000 as a basic savings level for contributors to reach by age 60, and RM650,000 as an adequate savings level.

“These (figures) aren’t arbitrary; they’re tied to estimated living costs.

“Yet, millions still have extremely low balances. 6.3 million contributors under 55 had less than RM10,000 saved as of 2023, meaning expected monthly retirement income of below RM42, a level that can consign retirees to ‘poor’ status,” he said in a Facebook post today.

Santiago said low balances, as well as early withdrawals, were the result of low wages, insecure employment and living costs rising faster than people could earn or save.

“Our system doesn’t just fail the poor; it produces retirement poverty. This matters because healthcare needs rise after retirement.

“If people have already drained their EPF accounts just to survive, they will be forced to scrape the bottom of the barrel when illness hits, even though healthcare is a public responsibility.

“The real question isn’t whether RM390,000 or RM650,000 is enough. It’s why such a large share of Malaysians will never even get close under today’s low-wage economy,” he said.

According to an FMT report yesterday, data shows that nearly 74% of active EPF contributors have less than RM100,000 in their accounts upon retirement, which will last just over five years for a single person or three to four years for a couple.

This amounts to RM1,500 per month for a single person or RM2,500 for a couple – lower than the current minimum wage of RM1,700 per individual.

An estimated 85% of Malaysian workers do not earn enough to fall within the income tax-paying bracket. With low wages, contributions to retirement funds such as EPF also remain low among a vast majority of the labour force.