00:00When Malaysians retire, one question comes up again and again.
00:09What should I do with my EPF?
00:12For nearly 97% of EPF members, the answer is simple.
00:17Take it all out in one lump sum.
00:20Sounds like freedom, doesn't it?
00:22But financial planner V. Rajinderan says that this freedom often fades fast.
00:30Most retirees, he warns, exhaust their EPF savings within 3 to 5 years.
00:37Why? Because many retire with less than 50,000 ringgit to begin with.
00:42And at 1,000 ringgit a month, that money barely lasts 4 years.
00:49Now the real problem, Malaysians are living longer than ever before.
00:54With life expectancy at about 76 years, retirement can stretch beyond 20 years.
01:01So what happens when the money runs out, but life goes on?
01:05In August, economist Madeline Verma said rising living costs are widening the gap between savings and retirement needs.
01:14Many are tapping into EPF early just to cope with daily expenses, she noted.
01:20Meanwhile, other countries saw this risk early and built-in safeguards.
01:24In Singapore, CPF Life pays retirees a monthly income for life, not a one-off payout.
01:31In Germany, pensions arrive every month for as long as you live, no lump sums.
01:37Meanwhile, Sweden goes a step further, adjusting payouts as people live longer.
01:41These systems don't take away choice, they prevent people from outliving their savings.
01:48Rajinderan says Malaysia could mandate partial endotization by requiring a portion of EPF savings
01:57to be channeled into monthly payouts to cover basic living needs,
02:01while still allowing some lump sum withdrawals for flexibility.
02:05He also suggested introducing a universal pension floor,
02:11a non-contributory basic pension for all elderly Malaysians, regardless of their EPF balance,
02:17to safeguard against poverty in old age.
02:24The goal here is to control its protection from poverty in old age.
02:28Because retirement security isn't about cashing out, it's about income that lasts.
02:34And I'm the Raja, F&T.
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