- 8 hours ago
Your salary stops. Your expenses don’t. Is EPF enough?
As Malaysia ages, what will it take to afford retirement, medical expenses and Elderly Care in later life—and how much difference will Budget 2027 make?
Join Tehmina Kaoosji and Bryan Zeng CFP®️, CEO of FA Advisory, Licensed Financial Planner & Financial Planning Association of Malaysia (FPAM) Member on NIAGA SPOTLIGHT for an International Day of Older Persons discussion focused on protecting your financial future.
As Malaysia ages, what will it take to afford retirement, medical expenses and Elderly Care in later life—and how much difference will Budget 2027 make?
Join Tehmina Kaoosji and Bryan Zeng CFP®️, CEO of FA Advisory, Licensed Financial Planner & Financial Planning Association of Malaysia (FPAM) Member on NIAGA SPOTLIGHT for an International Day of Older Persons discussion focused on protecting your financial future.
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NewsTranscript
00:22Hello, I'm Tamina Khosji and this is Niagara Spotlight.
00:26Today, our Spotlight falls on International Day of Older Persons or IDOP 2026, which is commemorated annually on the 1st
00:33of October.
00:34Now, within that dimension, our focus today falls on the big retirement question of whether the EPF is enough for
00:41Malaysians in their golden years.
00:43Now, Malaysians spend years building their EPF savings, but when retirement arrives, how long can EPF last?
00:51For Malaysia's growing aging population, that question now includes considerations far beyond daily expenses, including as well medical expenses, care
01:02costs for themselves, and even, of course, the big question of financial independence.
01:08Budget 2027 has recently brought about a couple of fresh support announcements, but what does that mean for the retirement
01:16of everyone in their golden years?
01:18In conjunction with International Day of Older Persons, we thus ask, is EPF enough?
01:23Joining me online now for this very interesting and timely discussion is Brian Zeng, CFP, CEO of FA Advisory, a
01:31licensed financial planner, as well as a Financial Planning Association of Malaysia FPAN member.
01:39A very good morning to you, Brian. Thank you so much for making time to join us.
01:43Morning, thank you for having me.
01:44Fantastic. So, Brian, let's get straight into the conversation and how exactly should someone in their golden years or approaching
01:52and planning for them think about EPF and whether it is sufficient for them.
01:57So, EPF 650,000 ringgit adequate savings benchmark is currently based on a single older person's expenditure in the Klang
02:07Valley spread out over 20 odd years.
02:10So, how should someone adapt that benchmark figure to their own circumstances? Tell us a little bit more.
02:17Thank you for that question, Tamina. I think I would use that $650,000 as a starting point to begin
02:24the conversation because the real question is whether can your resources pay for the life that you want for as
02:31long as you need it.
02:31Now, two people may have the same exact EPF balance, but they can have a very different level of retirement
02:37security.
02:39The benchmark of $650,000 is actually set based on an average of about $2,700 per month withdrawal, and
02:47this increases over 20 years to about $7,000 plus as the person gets older.
02:53And this is also based, again, on the budget of someone living in the Klang Valley.
02:57Now, of course, the first question is we need to ask ourselves whether this $2,700 per month is adequate
03:03for our daily expenses.
03:05So, my starting point would actually be to make a budget, right?
03:09A monthly budget, we firstly have to identify what are the absolute essentials, right?
03:15Like food, lodging, utilities, transport, or the basic health care.
03:20These are the spending that is essential and we cannot do away without.
03:24We also have to add in, of course, discretionary spending such as holidays and also your annual bills like car
03:32maintenance, insurance, housing maintenance as well.
03:35So, once we have the full year budget and we come down to a monthly figure, then we have to
03:42determine from this money figure, do we have other resources?
03:46Do we have an income source, for example, a pension?
03:50Another example could be you have a house that you are renting out and you are collecting rent.
03:54So, we will take your monthly expenses that you require, deducted by the amount of income that you have, and
04:02what is the balance?
04:03Then we will find out whether this can be covered by your EPF balance, right?
04:09So, another important point I like to raise out also is we have to really test it according to the
04:16time frame.
04:17What I mean is this very basic estimation is based on the 20 years.
04:25Now, for example, if a person retires at age 60, which is the official retirement age, budgeting for 20 years
04:32means our money will run out at age 80.
04:35Now, nowadays, if we are living healthy, we could very well live beyond 80.
04:40So, I would...
04:40There's even centenarians now in Asia, right?
04:43Absolutely, absolutely.
04:44So, for a more conservative planning, I would advocate at least plan until 90 or 95.
04:51That would leave us a little bit of bigger room in case, you know, we do really live longer than
04:57what we planned.
04:58Absolutely.
04:59So, that moves us into the other big question and turning retirement savings into that lasting income and stretching it
05:05to the max, right?
05:07So, Budget 2027, Brian, it also announces I amass, which offers monthly EPF withdrawals for members reaching 55 and 66.
05:14While their remaining savings continue earning dividends.
05:18So, how should a retiree then, if they're considering this, set a sustainable withdrawal amount that accounts for rising prices,
05:27unexpected expenses, as well as a possibility of, as you very clearly mentioned,
05:33the good luck that might be living beyond your planned retirement age of 20 years?
05:41That's right.
05:41I really do welcome the option of a monthly retirement withdrawal from EPF instead of the usual lump sum withdrawal.
05:50And we do not know what to do with it.
05:52Sometimes we may overspend and use up all our retirement money within five years.
05:56Now, the option to have this monthly withdrawal from EPF and yet keep the balance earning dividend, that will really
06:05help us lengthen our retirement efficiency.
06:09So, of course, the other important thing also is we are used to, especially for those of us who are
06:14having an employment, we are used to having a regular income.
06:18Now, this method also continues that regular income so that we can manage the budget on a month-to-month
06:25basis.
06:25But again, the important point is whether this monthly withdrawal matches our needs.
06:31So, carrying on from our earlier conversation, after we determined that the amount of money that we need to use
06:40for our daily expenses,
06:41both the essential and the discretionary expenses, one important thing to note as we grow older or as we lose
06:50our regular income is
06:51we must always have a reserve fund for emergency.
06:55So, one important note I would advise everyone to is to set aside an emergency buffer or emergency fund that
07:04we can use in case we get hospitalized,
07:07in case the car wouldn't start, in case of housing repair, so that this wouldn't eat into our retirement portfolio.
07:16And the second thing is we also have to budget in inflation because inflation can make a very big difference.
07:23Let me give you a very illustrative example of just a basic 3% inflation per year, which is very
07:31reasonable.
07:32Now, at a 3% inflation a year, something that costs $3,000 right now would cost $4,000 in
07:3910 years' time.
07:40Now, we may think 10 years is a very long time, but very often we will say time flies and
07:46suddenly we have one market later.
07:47Okay, and we also cannot rely on persistent high dividend, right?
07:54We have to again test plan, modeling a lower dividend or a longer lifespan, like what we had mentioned earlier,
08:02and perhaps also a period of extra care if we are not well, if we are not hospitalized, things like
08:10that.
08:10And another practical note is always to review this budget annually because life circumstances may change,
08:18things may move as we grow old, so we need to review the budget whether it is still relevant.
08:26Exactly. From time to time, rather than looking at it as an emergency once you come to that 10-year
08:32point, right?
08:33Right. So, Brian, from there, what can someone realistically do then about a late retirement shortfall?
08:39Life isn't always ideal. There may have been certain oversights, right, depending on individual to individual.
08:46So, for someone approaching retirement but with limited EPF savings and already outstanding debt,
08:52how would you prioritize what kind of decisions they need to be making now so that they are comfortable and
08:58not in too much of a pinch later?
09:00Yeah. All right. So, the first thing, of course, once we have the awareness, I would advise what not to
09:07do first, right?
09:08What we shouldn't be doing is to chase after the lost time.
09:13Now, we may be under a lot of pressure if we find out that we have a big gap that
09:18we need to fill,
09:19that our retirement is not sufficient, then we may be tempted to invest very aggressively into high-risk investments.
09:27And sometimes, we do not have that capability to, how to say, face with an investment loss, right,
09:37when we have very little time left.
09:39So, this is also the time where a lot of perhaps retirees or pre-retirees, they often fall into scams,
09:46right, financial scams.
09:47Exactly. Yes, and you've seen an increasing number of these reported scams.
09:51That's right.
09:51It's really urgent because quite often, retirees are also faced with the interlocking dimensions of needing extra money for retirement,
10:02but perhaps also not being in good enough health to work a little more or do even part-time work
10:08to make up the deficit.
10:10So, how do you propose that they meet this without falling victim to too-good-to-be-true scams?
10:17That's right. So, first thing I would do is, again, we assess the current situation.
10:22How much savings do we have? How much dependable income?
10:25When I say dependable income, again, I say, you know, if you have other assets like stocks paying dividend,
10:31or even if you want to rely on your children to pay for a certain portion of your retirement lifestyle,
10:38you need to have a very open and frank discussion with them how much they can afford to subsidize or
10:44to pay you over the years.
10:46So, again, we have to assess every single household expense, and we need to see, especially if a person is
10:53in that,
10:54we need to see whether there are any expenses that we can cut down, right?
10:58For example, if you are paying a very large amount of fee every month to go to a gym,
11:04perhaps you go do another alternative, just run in a park or exercise at home so that you can save
11:11up that portion, right?
11:13Again, there are many ways that is unique to different individuals.
11:19Eating out as well. If we cut out eating out, we can also save up some budget from that.
11:24And then from there, all these extra savings, you could always do two things with them.
11:28First is you can pay off your debt, right?
11:31Especially if you're still holding a high interest debt, unsecured debt.
11:34That is one of the things that you have to look into to pay it off so that it doesn't
11:39eat into your money.
11:41The second one is also if we need to save aggressively, right?
11:45From surplus income.
11:47And also consider, of course, if one is able to, consider working longer.
11:53Just by delaying your retirement for five years can make a huge difference.
11:57Because if you delay your retirement for five years, you will have extra five years of income and you will
12:02have extra five years of not depending on your retirement savings.
12:07However, again, not everyone can be healthy.
12:10Not everyone is fit to carry on their work beyond retirement.
12:16Then again, we have to assess the situation, each individual situation, whether they can like move into a smaller household,
12:24have some shared costs among family members and try to reduce the monthly expenses so that we can make our
12:32retirement fund last as long as possible.
12:34And as comfortable as possible.
12:36Speaking on that point, Brian, let's look at how families ought to be budgeting for elderly care in particular.
12:44Now, Budget 2027, it proposes reducing service tax on elderly care from 8% to 6% with an exemption
12:51for annual care fees going up to 9,600 ringgit.
12:56Beyond these concessions, how should then a family estimate what it may need to pay for their loved and elderly
13:03ones?
13:04And also distinguishing between costs covered by insurance or public services from those that families must ultimately themselves bear.
13:14Yeah, I'm very happy about this new development because our nation is going into an aging nation where more and
13:22more people above age 60 are becoming more, right?
13:27So it's very heartwarming to know that our government is looking into providing certain type of support for elderly care,
13:35which we don't have a lot previously.
13:37Now, the tax concession that was recently being presented in the budget, primarily, these are called tax concessions through the
13:45service care provider,
13:47meaning to say that they can now charge a lower SST rate or they can even expense it off that
13:53they don't have to pay SST if the amount is below 96,000 a year per individual.
13:58But that doesn't mean that automatically, as somebody who is paying for the elder care, that immediately the government will
14:05be paying this on our behalf.
14:07No, we still have to come up with that amount to pay for our elderly parents or relatives.
14:14So I would first again plan for the different level of support that is required.
14:20There are many different situations.
14:22For example, somebody elderly could be living independently on their own, but they may need occasional help compared to someone
14:31who would need regular, almost daily assistance.
14:35And they are also somebody who could require substantial supervision, something like a nursing care with a living nurse, so
14:43on and so forth.
14:43Now, all these different needs, right, can have very, very different expense requirements, so we need to plan as much
14:51as possible, looking at our own health or our dependents' health.
14:55And, of course, scout around, ask the service provider for written and confirmed quotations, ask them,
15:03are there any additional expenses that we do not foresee, such as medication, adult diapers, physiotherapy, transport, so on and
15:14so forth.
15:15So even if we consider a home care, it has also other costs, right?
15:20We may need to renovate the house to feed somebody who is in the wheelchair.
15:24We may need to renovate the bathroom as well to make it accessible.
15:28So all these have to be taken into account.
15:32And even, right, even if just an additional $1,000 every month, all that adds up, you know, if we
15:39budget it across five years or ten years.
15:42Ultimately, the family has to come together.
15:45Again, I would advocate transparent and open communication among the family members to ascertain, you know, who can help and
15:54pay the budget,
15:54who can come in and help physically in the elder care, and who can take over if the main caregiver
16:01is not available.
16:03Absolutely. And yes, correction on my side, it is RM96,000 up to the exemption for the services tax, of
16:12course.
16:12Thank you very much for the conversation and so far, Brian.
16:15We do take a quick break now.
16:17We will be right back with the rest of this conversation on Is EPF Enough in conjunction with IDOP 2026?
16:45Welcome back to Niagara Spotlight.
16:47Still with me, Tamina Kausji.
16:49And today, in conjunction with International Day of Older Persons 2026, or IDOP 2026,
16:55we're having a conversation on Is EPF Enough?
16:58Because, of course, the golden retirement years are also, at the same time simultaneously, quite often a source of financial
17:06strain.
17:07Brian Zhang, who is a certified financial planner and CEO of FA Advisory,
17:12joins us online for this very important discussion.
17:14Brian, getting straight back into the conversation.
17:17So let's now look at whether couples who are planning for retirement can actually look at doing something which is
17:25integrated for both of them.
17:27Now, a household may appear financially prepared, even when most retirement savings are actually under the name of one partner
17:34alone.
17:34How should we assess each person's security, financially speaking, particularly where one has taken time out of paid work for
17:44caregiving?
17:46And quite often, these happen to be the woman in the family and ensure that the surviving partner can also
17:52access sufficient income should a death occur for that couple.
17:57Well, these are very relevant questions.
18:00Thank you for that.
18:01I would first assess the couple together, look at their combined finances and resources, and then assess each partner separately
18:10to see what happens to the family when one of the partner is no longer around.
18:17So the question we need to ask is what actually each person holds.
18:21Like you mentioned, maybe the breadwinner of the family owns all the assets, right?
18:27We also need to ascertain what income each partner receives, whether there's only one primary breadwinner or are there any
18:35other sources of income?
18:37And also, whether each partner can have access to the assets in a very easy manner if the other person
18:46is not around.
18:46So all these are very important and very relevant questions, right?
18:51So what I would advocate is we should have separate accounts where each partner can have access to it.
18:59The important thing is we need to have that liquidity, immediate cash available for emergencies, right?
19:07Sometimes, perhaps it's not death.
19:10It could be incapacity.
19:12Maybe the breadwinner went through an accident and is hospitalized and he or she cannot go to the bank to
19:20manage their daily finances.
19:22Then the other person should need to be able to step in and take over the role.
19:27So having this accessible fund is very, very important.
19:31Again, how do we rely on this?
19:33We need to, of course, if possible, have an emergency fund being set aside in a very liquid bank account
19:41that's only a little bit of dividend, right?
19:44Other than that, what we can also rely on is very importantly insurance, right?
19:50To have medical insurance in case we are being hospitalized and income replacement, life insurance in case one partner passes
20:00away prematurely.
20:02We also need to review our existing asset holdings.
20:07For example, we need to review our EPF nominations, whether they are in order, our insurance and takafo arrangement as
20:14well.
20:14And whether we have prepared an estate plan, meaning whether we have written a will, how to distribute our assets,
20:21or even in certain circumstances, we may have set up a trust to take care of us in case we
20:28are not around.
20:28So it is quite a long and comprehensive conversation that we need to do, but all these are very, very
20:35relevant to ensure that the family, the survivors continue to live a dignified life if the breakwinner should pass away
20:44prematurely.
20:46Absolutely. And that brings us to the fact that Budget 2027, Brian, it allocates 1.3 billion ringgit for senior
20:53citizens' assistance, which hopes and aims to benefit nearly 200,000 or so seniors.
21:00So for an older person with little EPF savings, how should a planner then establish which type of assistance they
21:07can qualify for, or even what expenses this sort of a budget lump sum allocation towards the elderly can cover?
21:15And at the same time, at the same time being cognizant of shortfalls too?
21:19Yeah. So what the government has budgeted in the latest Budget 2027, these are mostly for the hardcore poor or
21:30those who really are living below a certain level of income.
21:34Right. And even that, it may seem generous, eligible person can claim up to 600 a month, right, from this
21:45Bantuan Wagah Amas, which is the name of the scheme.
21:48But again, we have to assess whether this 600 ringgit a month is sufficient for our daily needs.
21:54So what we need to do also, we need to assess whether this individual would be eligible for other type
22:01of relevant support as well, such as our STR, our SARA, or whether there are any relevant state promoted assistance
22:11that's available.
22:11Or we could even look at Zakat and other charitable assistance that's available to that individual.
22:20Now, the matter is, although these are being made available by the government and some other agencies, we cannot reliably
22:29depend on them for our care needs or our retirement needs.
22:34I always advocate that we should prepare well in advance, not just the dollars and cents, not just being financially
22:41sound and prepared, but also our health.
22:45I'm a big advocate of living healthily so that we have less illnesses and disease, which would take away a
22:52lot of our money and our enjoyment of life as well.
22:55So living healthily, eating healthily, exercise, all this will help us to have a very meaningful golden years.
23:03Absolutely. It is all, after all, very cumulative in nature.
23:07That brings us now, Brian, together with modern technology as well as AI-generated retirement advice being one of those
23:16niche arenas that is now growing in terms of expansion and coverage too.
23:22So some research is reporting that planners' expectations about AI rather than prove that it improves retirement outcomes.
23:30In your experience, if an older client brings you, let's say, an AI-generated plan saying that their EPF savings
23:36are sufficient, which assumptions would you be looking to fact-check first before you proceed?
23:44I would be absolutely happy if a person does come and check with us on this.
23:50First of all, it shows that this person is concerned about his or her retirement and would like to have
23:56fact-check certain opinions on the AI-generated retirement plan.
24:02Of course, there are a few things that we need to verify in the plan.
24:05Firstly, of course, is whether the input is correct.
24:10We have to look at the actual payments and the bills, the monthly expenses, whether it is accurately entered into
24:18the AI plan.
24:18Secondly, I would, of course, check the assumptions, whether the assumption is relevant, assumption in terms of how long a
24:25person would live, what is the interest rate, and how much is the monthly expenses needs as well.
24:32And I would also cross-check this against the Malaysian rules and data sources because a lot of these AI
24:39models are mostly based on US or the European country data and may not be relevant to our home ground
24:48situation.
24:50And like always, we also stress test this plan to a less favorable condition.
24:58For example, if a person lives longer, what would happen to this plan?
25:03If the interest rate or the dividend, EPF dividend becomes lower, what would also happen to this plan?
25:09So, I think all these are very relevant discussions, but I'd like to point out one thing.
25:14A person can have an absolutely perfect and accurate plan, but if the person doesn't act on it, then nothing
25:23would happen.
25:24It's just like you could sign up for a gym with the state-of-the-art equipment, but if you
25:30don't actually go to the gym and exercise, you won't benefit from it.
25:33So, disappointing on the individual accountability is very, very important.
25:40So, with that in mind, Brian, a few last thoughts before we end our discussion.
25:46Looking at, in particular, how can older people who have already signed up for their financial plans, etc.,
25:52but of course, as age and increasing infirmity maybe also becomes a growing concern for them,
25:59how can a planner help to put in place certain safeguards so that their own ability to manage money independently
26:06still remains
26:09and the integrity of the plan is assured, despite failing health, perhaps?
26:14Yeah, so this is a continuous process that we need to reveal on a regular basis.
26:20If not on an annual basis, perhaps every two years, we need to assess the current situation.
26:26People who are retiring in their early phase of retirement, rather, between 60 to 70,
26:32they can still do a lot of things on their own.
26:34They can still manage their rental homes.
26:36They can still manage their portfolio of investments, so on and so forth.
26:41But as the person grows older, you know, we may have a risk of dementia in certain people.
26:46We may have a risk of, of course, cannot keep up with so many responsibilities.
26:52So, I would always advise for people beyond the age of 70 or coming closer to age 80 to really
26:57simplify their finances.
27:00Don't put everything, you know, having a few houses here and there and portfolio and all that.
27:06It should be very simple, liquid, dice, all of them, put into a savings account that you can access it
27:13very easily
27:14and don't have to worry about managing your assets at that age.
27:18So, keeping it simple, of course, would put you in control and also those around you would be able to
27:25come in
27:25to assist when you are not able to as well.
27:29And on that note as well, I would also try to identify are there any trusted individual
27:37that this person trusts with any legal arrangement in case the older person cannot do certain things
27:47or cannot manage some or part of their finances, they need to appoint this individual.
27:52Now, all these things can be done via a trust or a will or a powerful attorney.
27:56What you need to do is you need to get relevant advice from the lawyers to have all these documents
28:03in place
28:04so that the things is assured when certain things happen that we didn't do.
28:12Absolutely, far ahead of time.
28:14Brian, thank you so much for the very insightful conversation on how our seniors and our elders
28:20can better prepare for their retirement beyond just looking at their EPFs.
28:25Well, a longer life should come indeed with financial security and choices.
28:29This means, of course, knowing what your savings can support, preparing for care costs
28:33and also getting advice you can trust.
28:35My thanks to Brian Zeng and FBAM for this timely conversation.
28:40I'm Tamina Kaosji signing off for now.
28:42We'll see you again next week right here on Niagara Spotlight
28:44with more economic analysis and insights.
28:47Here's to a productive week ahead.
28:49We'll see you again next week.
28:50Bye.
28:58Bye.
29:00Bye.