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100k bankrupt Malaysians. 70% has less than RM50k in EPF.

100k bankrupt Malaysians. 70% has less than RM50k in EPF.

Without our own additional savings, it’s only the EPF savings by the time we retire. However, the scariest thing is when we do not own the place we live in when we retire. Earlier article here: Escape poverty through property By then, without an income and still needing to pay a monthly rental is going to be a nightmare. One major reason for this was because of the lack of financial management understanding. In fact, I think we (Malaysians) are still stuck at the awareness level instead of understanding it better. Perhaps all university students must take a module in Personal Finance Management. I think I will be happy to contribute too, if requested formally. PLEASE NOTE, this is NOT about getting rich quickly through some unscrupulous or illegal way okay… For that, please go elsewhere, kopiandproperty.com is not the site to visit. 🙂

Article in Thestar.com.my here. Our Finance Minister Lim Guan Eng said one of the reasons why many Malaysians end up as a bankrupt is because of low financial literacy. A report by S&P Global Literacy Financial in 2014 says financial literacy rate in Malaysia is only at 36% while developed countries are at 59%. Lim said 100,610 Malaysians are declared bankrupt between 2013-2017. Based on EPF estimations, a person needs RM240,000 by 55 years old to retire comfortably. However, active contributors aged 54 only have an average of RM214,000 based on the EPF 2017 report. Lim said two thirds of contributors aged 54 only have RM50,000 maximum in their EPF accounts as of 2015 and proceeded to say that RM50,000 is insufficient and could run out within the first five years of retirement. Article in Thestar.com.my here.

How does one become a bankrupt? Here’s an earlier article. Bankruptcy, usual questions and answers It’s extremely scary if money runs out within 5 years because Malaysians are now living much longer. Earlier article here: When we are living longer, better prepare more. Remember yeah, if we rent just a room and the rental is RM500 per month, that’s RM6,000 per year. That RM50,000 in EPF is enough to only last 8 years even if we use it only for rental. Perhaps staying in a small town will stretch this longer but this will depend on whether it’s the life we aspire to have. However, if we have a fully paid home by then, even if it’s just an affordable apartment, that RM50,000 could then be used for other monthly expenses. How much could an affordable apartment be worth 30 years later? Actually, quite a lot (because money gets smaller…) Here’s that article: When we are 60, having just one RM1,000,000 property, possible? Happy understanding.

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Article written and edited by Charles. News article summarised by Dina Batrisyia.

written on 6 March 2019

Next suggested article: 7 reasons why we should start buying a property

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