Generate More Income Using Retirement Savings

By Fadzli Ramli MELAKA, Malaysia, Nov 25 (Bernama) -- The Employees Provident Fund (EPF) savings and other retirement savings are often seen by those who will retire as a ticket to become the 'nouveau riche'. However, reality hits them smack in the face when the savings failed to support their retirement needs. State Women, Family Development and Welfare Affairs Committee chairman, Latipah Omar said the scenario happened because they did not see the savings as a means to generate more income after leaving the employment world. "It's sad to see the mentality of the people who see the EPF savings and other retirement funds as the money to be spent lavishly on having fun and holidays, this is not right," she told Bernama. According to EPF statistics, as of last May, only 22 per cent of the 6.7 million active EPF contributors, aged 54, have enough savings of RM196,800 or more to support their retirement needs. Latipah said contributors, especially those with low salaries, would find it hard to save as the accumulated amount was small compared to those with medium and high salaries and cannot depend solely on EPF savings for retirement. "The EPF money alone is not enough. Apart from using it to do business or so, there must be other savings. "Start saving with the first salary. As for young people, don't even think to spend salary on big cars. Save first before think of other things," she said. Takaful and insurance consultant Amran Ali said the retirement savings should not remain static but should be invested in pension funds or other investments that could generate good income. Amran, 44, said the Amanah Saham Bumiputera and Tabung Haji were among the investments that could give good returns. "I also urge the people to contribute to the 'hibah' scheme of any takaful agency as this scheme can fund our family if we suffer disabilities or die." Amran said the public should have a financial plan for retirement as early as they started working and should not wait until final years before retiring. "We must plan wisely, think about the number that that we want to achieve during retirement and make realistic financial planning to achieve the target." EPF is a Malaysian government agency under the Ministry of Finance. It manages the compulsory savings plan and retirement planning for private sector workers in Malaysia. -- BERNAMA