Are my retirement savings enough?

 

A 6.3% dividend for our EPF savings? It was definitely welcome news for every active contributor regardless of age. That’s the highest rate since 6.4% in 2017 and a significant jump from 5.4% last year.

But hold your horses before you start celebrating. The rise in price of essential goods and services, and the impending higher costs of medicine and hospital charges would likely even out any real gains in our retirement savings.

Let’s get down to some basics. How much do you spend a month on average? EPF’s latest Belanjawanku 2024-2025 guide recommends a monthly budget of RM 2,690 for a senior single and RM3,390 for a senior couple living in the Klang Valley where the cost of living is higher. Are your monthly expenses anywhere close to those figures? Perhaps you have no clue?

If you spend without keeping track of how much goes where, then it’s time to work out a simple budget for your monthly expenses. Allocate for these main items: Food, utilities, transportation, healthcare, personal care, social activities and miscellaneous.

One major item not in the list – loans and mortgage. Most retirees would have paid off their housing loan, and since they are no longer eligible for bank loans, they are free from that encumbrance too. Stay away from loans of any kind, and dubious money-lenders. You need to be debt-free in your retirement. Prudent money management is key to financial security for retirees.

Unfortunately, wisdom does not always equate with age for some retirees when it comes to money management. This is especially true for those who withdraw all their EPF savings in one lump sum upon reaching 55. They make plans for what they can do with the savings. Dreams can finally be fulfilled. Enough capital to start a small business or invest in quick-returns schemes and trips to exotic places. Some will go on a shopping spree for branded items and jewellery while others will indulge in classy watches or luxury cars.

The retirement years is not the time to keep up with appearances. These are the retirees who find themselves suddenly with so much money in their bank account they become reckless or foolish with their spending. Did you know that you can leave your savings in EPF till age 100? And you can arrange for monthly withdrawals?

Think carefully, spend wisely

There are retirees who subscribe to YOLO (You Only Live Once). They don’t want to miss out on the good things in life. They want to live life to the fullest. When they leave, they can say they have no regrets.

Their bucket list is no longer a wish list. “It’s my money and I can do what I want with it” is their response to well-meaning advice.

What about emergencies like an urgent surgery? “My children will take care of that”, they will say. Will they? Can they? Best not take for granted our children will care for us, support us in our old age.

They may not be financially independent. They may be pursuing post-graduate studies, or have housing loans, car loans and credit card debts to settle. Or young children to raise. Some may need funds to start a business. Who will they turn to for interest-free loans? Mommy and daddy, of course. It’s hard to say “No”. There goes a huge chunk of our hard-earned retirement savings.

At the other extreme are those who guard their savings like Uncle Scrooge, scrimping and getting by with the bare minimum even though they have accumulated a sizeable nest egg. They fear they may not have enough should a calamity befall them like an emergency health crisis that would gobble up almost their entire savings.

Most insurance policies provide coverage only till 75 years.

We lament government wastage of public funds but we are guilty of wasteful spending too. Buying more than we need and spending on things that do nothing to improve our health or wellbeing. Mindless shopping, that’s what it is. Instant gratification when we should know better at our age.

But of course, if you have plenty of money to spare, by all means indulge. Just pray you have enough set aside for emergencies that may swallow up almost all your life’s savings.

Even death is costly these days. Funeral packages can cost anything from RM20k!

There is no need to deprive ourselves of the simple things in life. Spend wisely and within our budget. Live a simple life. Indulge occasionally. Economise. Downsize. Less is more. When we spend less on wants, we have more to spend on needs.

One of the biggest concerns of retirees is having enough to cover medical emergencies. Many may not realise that this includes covering not only our own medical and healthcare expenses but also those of our elderly parents.

Planning for longevity

Longer life span means retirees in their 60s and 70s may still be taking care of their parents who are in their 80s and 90s! The longevity dividend is also the longevity deficit.

Just to give you an idea of high hospital charges, not that long ago I spent two weeks in a private hospital for some tests and observation. No surgeries. Nothing invasive except for a very minor procedure, but the bill was a shocker – almost RM30,000!

Another major item to set aside adequate savings for is retirement housing. A day will surely come when we will be alone, through personal choice to remain single, or through the loss of a spouse.

Much as we would prefer to age in place, that is in the comfort of our own home, it is not advisable to live alone in old age, regardless of whether you are still relatively fit and in good health. All it takes is just a fall or a stroke to render us helpless. We may have to seriously consider moving to an aged care facility or a senior retirement home. The fees charged can be anything from RM5000 to RM10,000 a month, depending on the level of care you require.

Will our retirement savings cover the above contingencies?

EPF has come out with the three-tier Retirement Income Adequacy (RIA) Framework set to launch in January 2026: Basic savings of RM390,000, covering essential retirement needs; adequate savings of RM650,000, providing a reasonable standard of living during retirement; and enhanced savings of RM1.3m, supporting greater financial security and independence for a higher quality of life.

We could use the above RIA as a guide. The current existing Basic savings is RM240,000 at age 55. Note the huge increase to keep pace with rising inflation and the current retirement age of 60 in Malaysia.

Saving early and making it a lifelong habit is key to having sufficient retirement funds to live on when you stop working after 60. If you are good at value investment or have a reliable financial advisor, you can make your money grow.

To the average worker, who contributes to EPF, nothing can beat seeing your savings grow exponentially through compound interest. Baby boomers who started contributing when they received their first salary would probably have adequate savings to live comfortably.

With longer life span, retirees need sufficient savings to tide them over the next 10-20 years upon retirement. Never too late to start developing healthy lifestyle habits to avoid non-communicable diseases that are common among older adults.

Long term care can swallow up all our savings. Let’s be responsible for our health rather than rely on the government or our children to take care of us. Be prudent in our spending and stay debt-free.

Lily Fu is a gerontologist who advocates for seniors. She is founder of SeniorsAloud, an online platform for seniors to connect and enjoy social activities for ageing well.

(The above article was first published in the print edition of the Star on 12 March 2025. The online edition can be accessed HERE.

VALENTINE'S DAY...IS LOVE ALL AROUND?

Everyday is Valentine’s Day for Mr and Mrs Jagjeet Singh, married for 61 years. — MRS J

It’s Valentine’s Day today. Brisk business for florists, restaurants and hotels as young couples out-do themselves to express their love for each other. From over-priced roses and chocolates to romantic candlelight dinners and the umpteenth honeymoon trip. Love is certainly in the air and all around.

However, for most long-time married couples, the day would likely be just another day. Husbands would think thrice about spending money on gifts for their wives. Wives would probably wish their spouse could be a bit more romantic. Asian husbands are known to be pragmatic, not romantic. To them, a simple satisfying meal at a seafood restaurant, or a movie outing should suffice. A bottle of Chanel No 5? A bouquet of red roses? A new watch? Nah! Wives can dream on.

After all, Valentine’s Day, like birthdays, comes every year. Makes more sense to celebrate silver or golden wedding anniversaries. They come around only once in decades. Such milestones deserve a grand celebration with family and friends. Not Valentine’s Day.

The changing face of love

When a couple has spent more than half a lifetime together, they know practically everything about each other. It’s almost like they can read each other’s mind, down to completing each other’s unfinished sentences. They are so comfortable with each other that they no longer see the need to delight or surprise with little romantic gestures on Valentine’s Day. To such couples, every day is Valentine’s Day, celebrated in a thousand and one simple ways like holding hands when crossing the road, taking turns to cook meals, sharing the household chores, looking after each other when one is sick.

For baby boomer couples now in their 70s, the giddiness of romance has long left their marriage, to be replaced by quiet acceptance or tolerance of each other. Years of familiarity breeds ease and comfort in each other’s company.

On the flip side, while many older couples remain together, there is no love lost between husband and wife, and it is plain for all to see. There is little or no communication, even less physical touch. It is like two strangers living under the same roof out of convenience. For these couples, the last spark of love has long died; the dying embers refuse to be reignited. Divorce is messy and expensive. The best option is to let things be as they have been for so many years. No point rocking the marital boat and plunging into deep waters. Just avoid getting into each other’s hair as far as possible. It all boils down to incompatibility. Perhaps they were not meant for each other in the first place. For them, Valentine’s Day holds no meaning or significance. It’s just another day to be struck off on the calendar.

Many single seniors are happy singles, especially those who went through an unhappy marriage and are divorced. They are living life free from marital woes and stress.

What about senior singles? Do they dread Valentine’s Day? Is it a reminder of their status quo? When they see their married friends happily celebrating with their spouse, do they feel envious? For the widowed, is it a day of loneliness and loss?

Take heart, senior singles. Unless you are married to someone wonderful, it’s better to remain single. Loving, caring husbands are a dying breed. So are loving, caring wives. And if the right one doesn’t show up within your peripheral vision or on your door-step, it’s not the end of the world. Indeed, some married women secretly envy their carefree single girl friends who go where they want, and with whom they like. They answer to no one. Today the single older woman is bold and uncompromising. They are not afraid to live life according to their own rules.

Seeking love out

For senior singles, they have a choice – to remain single, or be open to marriage. But where and how does one find a lifelong partner? Online dating sites? Social hangouts? Activity groups for seniors? Matchmaking agencies?

Back in the 1930s and 40s, arranged marriages were common. Social norms were strict especially for girls. They had little say in the choice of a life partner. Should they lose their husband, they were expected to remain widows for the rest of their lives.

Single parents - my mom and me, with my two little girls in cc 1973. 

This was the case with my mother. She never remarried, and remained a widow for 68 years till she passed away at age 94. It would be rare for a young widow these days to remain single and faithful to the memory of her dearly departed husband. We are all social beings. We need friends, we need companionship. Loneliness in our later years is a slippery road to depression, and that is something to avoid at all costs.

It takes a lot of hard work to nurture a relationship, a lot of give and take to reach that stage where one simply can’t live without the other. They complete each other. Each is the other half, and they fit perfectly together. Many young couples don’t have the patience to work at it. Gone are the days when wedding vows were taken seriously and couples remained married “till death do us part”. Second marriages were almost unheard of, as were divorces. Indeed, to ask for a divorce would be like asking to be ostracized socially.t

We are living in modern times. There is no social stigma attached to remaining single, divorced or separated. Idle tongues do not wag as much now at single older women and men going on dates to celebrate Valentine’s Day. It is liberating to know that society has become more accepting of divorcees and of second marriages. Gossip mongers will have little ammunition to hurt anyone. It is none of their business who their single senior friends go out with, or if the latter decide to get a divorce or marry again. I say this because there are older men and women who deprive themselves of a chance to be happy again in a new relationship, for fear of others talking about them behind their backs. Live life for yourself, not for others.

For longtime married couples that have lost that loving feeling, but do not want a divorce for whatever reasons, there is one solution that is gaining popularity in Japan. It is ‘Sotsukon’. It’s the perfect compromise for couples who still have some affection for each other, but want to have the freedom to pursue their own interests. The arrangement is akin to living together as housemates, with each partner enjoying independence and freedom to make new friends and enjoy a new lifestyle. Both parties may not want to go through a divorce especially if no third party is involved. For these couples Sotsukon makes sense - still together as a couple but living apart. This is not the same as being estranged. They remain friends and still care for each other as in a platonic relationship.

Such arrangement is already in common practice here among older seniors who have no desire to marry or remarry, but are fine with having a constant companion or partner.

Whether you are single, married, divorced or widowed, we should be celebrating love every day, in the little things we do, not necessarily in gifts for the people we love. Love doesn’t have to cost a cent. Love can be a genuine smile, a warm hug or an affectionate kiss. Or a good deed for someone we don’t know but who needs our help.

Spread a little love today, and every day. Happy Valentine’s Day.

Lily Fu is a gerontologist who advocates for seniors. She is founder of SeniorsAloud, an online platform for seniors to connect and enjoy social activities for ageing well.

(The above article was first published in the Star on 12 Feb 2025. The online version can be acessed at this LINK.