When We Retire, Do We Have a Free Place to Stay? If Not, Better Read This as an Early Warning
There is one retirement question that I think more Malaysians should ask themselves much earlier.
When I retire, where will I live?
Not where I want to live.
Not whether I can afford a nice condominium.
Not whether my children will allow me to stay with them.
The simple question is:
Will I have a place to stay without having to pay rent every single month?
This may sound like a property question.
Actually, it is a retirement question.
And with the latest numbers from EPF, I think this question has become even more important.
How much do we really need to retire?
Starting from 1 January 2026, EPF’s Retirement Income Adequacy (RIA) Framework has three retirement savings levels.
Basic Savings: RM390,000
Adequate Savings: RM650,000
Enhanced Savings: RM1.3 million
These are the savings levels EPF uses to help Malaysians assess whether their retirement savings are sufficient.
Let’s start with the RM390,000.
EPF says the Basic Savings level is intended to provide a minimum retirement income of about RM1,625 per month for 20 years, from age 60 to 80.
RM390,000 sounds like a lot when we see it sitting in our EPF account. But RM1,625 per month sounds very different.
Food.
Utilities.
Transportation.
Healthcare.
Insurance.
Telephone.
Internet.
Car maintenance.
Unexpected expenses.
And then…
RENT.
Suddenly, RM1,625 doesn’t sound like very much.
And that is the point I want to highlight.
Retirement planning is not simply about how much money we have. It is also about how many expenses we still have when the salary stops.
What if we need to rent?
Let’s use a very simple example.
Suppose someone retires at 60 and needs to pay RM1,500 a month in rent.
That is:
RM1,500 × 12 months = RM18,000 a year.
Over 20 years:
RM18,000 × 20 = RM360,000.
That is almost the entire RM390,000 Basic Savings level.
And this calculation assumes the rent never increases. We know that is unlikely. It also doesn’t include deposits, moving costs, maintenance or any other housing-related expenses.
I am deliberately using a simple calculation here. The purpose is not to predict exactly how much someone will spend. The purpose is to show something that is very easy to overlook:
Housing can consume a huge portion of retirement savings.
And RM2,690 a month isn’t exactly luxurious
EPF’s Belanjawanku 2024/2025 provides estimated monthly expenditure for different types of households and locations.
For a single elderly person living in the Klang Valley, the estimated monthly expenditure is RM2,690.
For an elderly couple, it is RM3,390 per month.
These are not figures for a luxurious retirement. They are intended as a guide for a reasonable standard of living.
Now imagine a retiree who needs RM2,690 a month to live reasonably… and then has to add RM1,500 for rent.
The monthly requirement becomes roughly:
RM4,190.
And that is before we start talking about a particularly expensive medical bill, helping our children, travelling, replacing a car or dealing with other unexpected expenses.
This is why I think we sometimes underestimate how much money we actually need in retirement.
We look at our EPF balance. We see RM500,000.
We think:
“That’s quite a lot.”
But perhaps the better question is:
“How much of that RM500,000 is actually available for me to live on after paying for housing?”
That is a very different question.
A fully paid house can be a retirement asset
This is where property becomes interesting. I am not saying everyone needs to buy multiple properties.
I am not saying everyone should stretch themselves to buy the most expensive house they can afford.
And I certainly don’t think property is the only way to prepare for retirement. But there is one major advantage of having a fully paid home.
The housing cost can eventually fall dramatically.
The house may not make us rich. It may not appreciate spectacularly. It may not even be in a fashionable location.
But if the mortgage has been fully paid and the house is suitable for retirement, we have removed one of the biggest recurring expenses from our retirement budget.
That can be extremely valuable.
A RM300,000 house that is fully paid may not sound impressive compared with a RM1 million property.
But if that RM300,000 house means we don’t need to pay RM1,500 rent every month for the next 20 years, its retirement value is much more than just the property price.
“But I prefer to rent and invest the difference.”
I have heard this argument many times. And yes, it can work. There is nothing inherently wrong with renting.
If someone can invest consistently, build a sufficiently large portfolio and generate enough income to cover rent throughout retirement, the strategy can be perfectly viable.
But then we have to be honest about the numbers. If we choose not to own our retirement home, we are effectively saying:
“My retirement portfolio needs to fund my housing for the rest of my life.”
That means our investment portfolio has to be bigger.
How much bigger?
That depends on the rent, investment returns, inflation, how long we live and many other factors.
But it is certainly not zero. This is why I don’t think the rent-versus-buy argument should be discussed purely in terms of whether property prices will appreciate.
The bigger question is:
Which option leaves me with a more sustainable retirement budget?
And we are living longer
There is another reason why this matters. Retirement may last longer than we think.
According to the Department of Statistics Malaysia’s Abridged Life Tables, a Malaysian male who reaches age 60 could expect to live another 18.3 years, while a female at age 60 could expect another 21.1 years, based on the 2021–2023 figures.
In other words, retiring at 60 doesn’t mean we only need money for a few years.
We may need it for two decades or more. And Malaysia is getting older.
DOSM reported that Malaysians aged 65 and above accounted for 8.0% of the population in 2025, up from 7.6% in 2024.
This is not just an individual issue. It is becoming a national issue. More Malaysians are going to spend more years in retirement. And more Malaysians are going to discover that their retirement savings have to last much longer than they originally expected.
So should everyone buy a house before retirement?
No.
That would be too simplistic.
A retiree living in a small town may need far less for housing than someone living in Kuala Lumpur. Are we intending to stay in a small town then? If yes, that’s great. If no, then be prepared.
Someone may already own a fully paid home.
Someone may have a substantial investment portfolio.
Someone may have a pension.
Someone may eventually move back to their hometown.
Someone may choose to rent because they value flexibility more than ownership.
There is no single retirement formula that works for everyone.
But there should be one thing that everyone knows:
Where will I live, and how much will it cost me?
If the answer is:
“I own my home outright.”
Great.
If the answer is:
“I have investments that can comfortably pay the rent.”
Also fine.
If the answer is:
“My children will take care of me.”
I would probably think about this one a little more.
And if the answer is:
“I have never really thought about it.”
Then perhaps now is a good time.
RM650,000 is not the finish line
There is another interesting thing about EPF’s new framework.
RM650,000 is now the Adequate Savings level.
EPF’s own materials make clear that this is a framework for assessing retirement income adequacy, rather than some magical number that guarantees a comfortable retirement for everyone.
And there is an even higher level.
RM1.3 million.
That is the Enhanced Savings level.
It sounds like a lot.
And for many Malaysians, it is a very large amount of money.
But even RM1.3 million has to be looked at in the context of how long we need it to last, where we live, our lifestyle and our healthcare needs.
The bigger point is this:
Don’t simply chase a retirement number. Understand what your retirement actually costs.
And housing is a major part of that calculation.
The house doesn’t have to make you rich
I think this is where we sometimes get property investing wrong. We spend a lot of time asking:
“Will this property go up 10%?”
“Can I make RM100,000?”
“What’s the rental yield?”
“Will the area become the next hotspot?”
Those are useful questions for property investors.
But for retirement planning, there is another question.
“Can I live here FOR FREE when I no longer have a salary?”
That changes everything. A retirement home doesn’t necessarily need to be an investment property.
It doesn’t need to be the best property in the neighbourhood.
It doesn’t need to have spectacular capital appreciation.
It simply needs to be:
Affordable.
Suitable.
Accessible.
And hopefully fully paid.
That can be an incredibly powerful retirement asset.
So, what is your retirement home?
This is the question I want everyone reading this article today to ask themselves. Especially ANY writer / influencer who kept saying that property investment is NOT necessary and that their way of investing will have higher returns etc. Remind yourself, this higher return must cover staying for free after retirement!
Not:
“How much is my EPF?”
Not:
“How much is my house worth?”
Not:
“Can I retire at 55?”
Instead:
“When I retire, where am I going to stay, and who is paying for it?”
If the answer is:
“My fully paid house.”
Excellent.
If the answer is:
“My investment income will pay the rent.”
Also fine — provided the numbers really work.
If the answer is:
“My children will take care of me.”
Please think about this one again.
And if the answer is:
“I don’t know.”
Then perhaps this is the early warning.
EPF has given us the numbers.
RM390,000 Basic.
RM650,000 Adequate.
RM1.3 million Enhanced.
But perhaps there is another number we should calculate for ourselves.
How much will I need to keep a roof over my head for the rest of my life?
Because when the salary stops, the EPF withdrawals begin and the working years are behind us, the last thing we want is to discover that we have enough money to survive…
but not enough money to pay for the roof over our head.
Happy understanding and questioning!
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Sources
- Employees Provident Fund (EPF), Retirement Income Adequacy (RIA) Framework / Belanjawanku 2024/2025.
- Employees Provident Fund (EPF), i-Invest / Basic Savings explanation — RM390,000 and RM1,625 monthly over 20 years.
- Employees Provident Fund (EPF), 5 Hidden Expenses After Retirement — including Belanjawanku retirement expenditure estimates.
- Department of Statistics Malaysia (DOSM), Abridged Life Tables, Malaysia, 2021–2023.
- Department of Statistics Malaysia (DOSM), Current Population Estimates, Malaysia, 2025.
