PETALING JAYA: For decades, retirement planning has largely been about one question: how much is enough to save?<\/p>\n
As Malaysians live longer and face rising living costs, the bigger challenge may come after retirement: how to turn decades of accumulated savings into a dependable income for the long term.<\/p>\n
Hence, this points to the \u201csecond half\u201d of retirement planning that the Employees Provident Fund (EPF) head of policy and strategy Balqais Yusoff said deserves greater attention, as the focus extends further, from accumulating savings to managing and drawing them down sustainably.<\/p>\n
\u201cFor many years, the retirement conversation has focused on how much we need to save. That remains fundamental,\u201d Balqais said.<\/p>\n
\u201cBut a Malaysian may spend 30 or 40 years building retirement savings, followed by another 20 or 30 years living on what has been accumulated. We must give equal attention to both sides of that journey,\u201d she told StarBiz.<\/p>\n
This requires a clear plan for how those savings can support financial independence, well-being and dignity throughout retirement.<\/p>\n
This, Balqais noted, brings the focus to the \u201csecond half\u201d of retirement planning, which is often overlooked.<\/p>\n
\u201cThe \u2018second half\u2019 matters because retirement fundamentally changes how we manage our finances.<\/p>\n
\u201cMalaysians are living longer, the cost of living continues to rise, and people are increasingly expected to make important financial decisions both in preparing for retirement and in managing their savings after they retire,\u201d she said.<\/p>\n
Accordingly, circumstances can shift significantly with time, bringing new and potentially stronger financial demands.<\/p>\n
This is especially true when regular employment income comes to an end, even as everyday expenses continue.<\/p>\n
\u201cRetirement today is very different from what it was a generation ago,\u201d she said.<\/p>\n
Balqais stressed that savings built over the years may have to stretch much further, potentially supporting decades to come, as inflation persists and needs evolve with age.<\/p>\n
She noted that the conversation goes further, from how much Malaysians realistically save each month and how long those savings will last, to managing unexpected expenses.<\/p>\n
Most importantly, Balqais said it is about turning savings accumulated into regular income we can depend on in the long term.<\/p>\n
\u201cA retirement balance, on its own, does not guarantee a sustainable retirement income,\u201d she said.<\/p>\n
The challenge therefore extends to whether those savings will be enough to cover living costs throughout retirement.<\/p>\n
Against this backdrop, several financial risks deserve greater attention.<\/p>\n
Balqais pointed out longevity risk, whereby individuals may outlive the savings they have accumulated for retirement.<\/p>\n
\u201cLongevity risk is becoming increasingly important as Malaysians live longer.\u201d<\/p>\n
Although longer life expectancy is a positive development, it also means a longer retirement to fund, she added.<\/p>\n
\u201cSomeone retiring at 60 could potentially spend another 20 or 30 years in retirement.<\/p>\n
\u201cFood, housing, utilities, healthcare and other needs will continue, so retirement savings may need to support us for several decades,\u201d she explained.<\/p>\n
This raises the risk of inflation, as the cost of living does not stop rising when retirement begins.<\/p>\n
\u201cThe same amount of money will buy less in 10 or 20 years than it does today.\u201d<\/p>\n
Balqais stressed that savings need to keep generating returns to preserve purchasing power throughout retirement.<\/p>\n
\u201cRetirement planning therefore cannot focus only on the amount accumulated at the point of retirement,\u201d she said.<\/p>\n
This then points to a key aspect of financial sustainability: decisions made before and during retirement determine whether savings are sufficient and how long they last.<\/p>\n
Another key risk is financial behaviour, which relates to the decisions made along the way.<\/p>\n
\u201cBefore retirement, delaying planning, saving too little or not adjusting our plans as circumstances change, can leave us with insufficient savings later in life.<\/p>\n
\u201cHowever, drawing down too much too quickly, during retirement, can cause savings to run out prematurely,\u201d Balqais explained.<\/p>\n
On the other hand, she noted that if retirees are being overly cautious, it may mean they do not fully utilise their savings to support their needs and quality of life.<\/p>\n
\u201cThe key is to find a sustainable balance,\u201d she said, stressing that retirement planning must cover both sides of the journey.<\/p>\n
\u201cThis is where the distinction between accumulation and decumulation becomes important.\u201d<\/p>\n
Accumulation is where sufficient savings are built during the working years, while decumulation is about how those savings are subsequently drawn down and managed to support us throughout retirement, she noted.<\/p>\n
An equilibrium is reached when individuals build sufficient savings during their working years and manage those savings carefully, Balqais said.<\/p>\n
This is to provide a sustainable source of income once they retire.<\/p>\n
Against these risks, Balqais highlighted a key gap in how retirement planning is approached.<\/p>\n
\u201cRetirement planning is still largely seen as a savings exercise: how much we can accumulate by the time we retire.\u201d<\/p>\n
She said that accumulating savings is only one side of the equation.<\/p>\n
\u201cThroughout our working lives, most of us become accustomed to having a regular flow of income.<\/p>\n
\u201cFor salaried employees, a salary comes in every month; for others, income may come in at different intervals, but there is still an expectation that earnings will continue as long as we are working.\u201d<\/p>\n
As it is, spending patterns are built around that regularity: groceries, utilities, housing, transport and other expenses continue from one month to the next.<\/p>\n
That makes the retirement challenge clear: how do we turn our accumulated savings into a regular and dependable income to meet these ongoing expenses?<\/p>\n
\u201cThat transition requires a different mindset,\u201d she stated.<\/p>\n
At face value, a large retirement savings balance may create the impression that there is plenty to spend.<\/p>\n
However, the same amount takes on a very different meaning when it must provide an income for the next 20 or 30 years.<\/p>\n
Instead of treating that retirement balance as a pool of money to withdraw, it is more useful to think of those savings as a source of future income that needs to be managed carefully and sustainably, Balqais said.<\/p>\n
There is also a tendency to think of retirement as one long, uniform period, Balqais pointed out.<\/p>\n
\u201cIn reality, our financial needs are likely to change as we move through different stages of retirement. The early years may involve a more active lifestyle, including travel, family activities or other plans that were postponed during our working years.<\/p>\n
\u201cAnd while spending could moderate as we get older, healthcare, medical and care-related needs may become more significant later in life,\u201d she explained.<\/p>\n
Therefore, Balqais noted retirement planning needs to provide some flexibility as those needs transition over time.<\/p>\n
That said, individuals often prepare for the expected but overlook the unexpected, she added.<\/p>\n
A retirement plan may account for regular monthly expenses, but unexpected healthcare costs, home repairs, family responsibilities or other financial shocks can arise.<\/p>\n
\u201cSome flexibility and financial buffers are important so that these events do not unnecessarily disrupt longer-term retirement needs,\u201d she emphasised. \u201cIn simple terms, retirement planning should not stop when we reach our savings target.<\/p>\n
\u201cBefore retirement, the focus is: how much do I need to build? Once we retire, the question becomes: how do I make what I have built provide a regular and sustainable income for the years ahead?\u201d<\/p>\n
Closing this gap will require sustained efforts towards improving income levels, and strengthening financial resilience, enabling more Malaysians to maintain a decent standard of living, before and during retirement.<\/p>\n
Overall, Balqais said the country\u2019s retirement landscape is progressing, but its financial security remains uneven.<\/p>\n
\u201cStrengthening the system requires action on widening retirement income coverage so that more Malaysians are protected, and improving adequacy so that this protection translates into meaningful financial security in old age.\u201d<\/p>\n
Balqais highlighted two important questions to assess the health of retirement plans.<\/p>\n
\u201cAre enough Malaysians covered by some form of retirement income protection, and are they building sufficient savings to support an adequate income in retirement?\u201d<\/p>\n
Balqais noted that this requires Malaysians to look beyond savings balances alone.<\/p>\n
On retirement income coverage, she said the country has a relatively established system for those in formal employment, via the EPF and public service pension arrangements.<\/p>\n
The bigger challenge, however, is ensuring that retirement protection also extends more consistently to people outside traditional formal employment, such as the self-employed, gig workers and those with irregular or intermittent incomes.<\/p>\n
\u201cFor these groups, participation and contributions may be less consistent, which can translate into gaps in retirement protection later in life.<\/p>\n
\u201cAs the way Malaysians work continues to change, retirement coverage also needs to evolve with it,\u201d Balqais said.<\/p>\n
Meanwhile, she noted retirement income adequacy has seen encouraging signs of improvement.<\/p>\n
\u201cEPF members\u2019 savings have continued to recover following the Covid-19-related withdrawals.\u201d<\/p>\n
As at the end of June 30, 2026, 38.9% of active formal sector members had achieved the basic savings threshold by age, compared with 25% at the end of June 30, 2022, according to Balqais.<\/p>\n
For adequate savings, the proportion increased from 15.9% to 27.3% over the same period.<\/p>\n
\u201cWhile these improvements are encouraging, they also highlight that a significant proportion of members have yet to achieve savings levels that can support an adequate retirement income,\u201d she said.<\/p>\n
Balqais indicated that while the direction is positive, Malaysia still has considerable ground to cover.<\/p>\n
\u201cWith the median monthly wage at around RM2,900, approximately 54% of EPF formal sector members earn below the living wage of RM3,100.<\/p>\n
\u201cThis limits their capacity to build sufficient retirement savings,\u201d she pointed out.<\/p>\n
Balqais said these savings outcomes cannot be viewed in isolation.<\/p>\n
Ultimately, Malaysia\u2019s retirement landscape depends not only on broad coverage and adequate savings, but on whether those savings can provide a dependable income throughout retirement.<\/p>\n
Balqais reiterated that financial preparedness for retirement hinges on contribution consistency, inflation, healthcare and care needs, debt obligations and increasing longevity.<\/p>\n
That said, she remains optimistic about the longer-term outlook.<\/p>\n
Balqais highlighted that Malaysia has made meaningful progress in strengthening retirement security, with encouraging signs of a recovery in retirement savings.<\/p>\n
\u201cProgressive wage growth, more consistent employment and contributions, longer working lives, and measures that encourage greater retirement savings can all help strengthen retirement outcomes,\u201d she said.<\/p>\n
Balqais will lead a session to explore the often-overlooked \u201csecond half\u201d of retirement planning, from knowing how much you need and growing your savings, to turning accumulated savings into a sustainable income that can last through retirement, on Sept 12, 2026.<\/p>\n
The event will be hosted by The Star Live Session, bringing together pre-retirees and Malaysians aged 40 and above for a conversation on navigating life after retirement.<\/p>\n","protected":false},"excerpt":{"rendered":"PETALING JAYA: For decades, retirement planning has largely been about one question: how much is enough to save?…\n","protected":false},"author":2,"featured_media":679491,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[177],"tags":[79,68470,179,18,29249,267021,287503,19,17,287504,234,235,101593,250593,118460],"class_list":["post-679490","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-costofliving","tag-economy","tag-eire","tag-epf","tag-financialplanning","tag-financialsecurity","tag-ie","tag-ireland","tag-longevityrisk","tag-personal-finance","tag-personalfinance","tag-retirementincome","tag-retirementplanning","tag-retirementsavings"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/117238467572974489","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/679490","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=679490"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/679490\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/679491"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=679490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=679490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=679490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}