Recently I saw a friend of mine quit his job to take care of his ailing father. He had a pretty stable job. Probably brought back a good RM7-RM8 thousands a month with his job then. He’s the sole breadwinner. He will be going back to Batu Pahat Johor to live with his father. He will be taking his wife and his 2 sons with him. His father was too old to be living alone and his father just don’t want to live with him in Selangor. It’s not our culture to send old people to old folks home hence as a good son he is, he moved his home to Batu Pahat and lives with his dad. He earned a living by driving for Grab while doing some odd jobs here and there.
This situation is not at all uncommon. We find there’s more and more people living with their mom and dad. And this doesn’t look like it will change any time soon. According to the data shared by Employee Provident Funds, on average contributors who are aged between 50-54 only have RM200 thousands in their account. What’s worse, 67% of these folks have less than RM50 thousands in their accounts. The rich have so much money it inflated EPF average number for that age bracket. That’s very very worrying.
Let’s assume that many of these old folks will indeed retire with RM50 thousands in the bank. Let’s further assume that these vintage folks will continue to live for another 15 years as Malaysia’s life expectancy is indeed 75 years old.
What can RM50 thousands give you over 15 years? That’s about RM278 a month. How much does a pensioner needs to live nowadays? This is what EPF shared.
That’s right folks, for a vintage couple, they need about RM3,100 or RM1,500 per person in a month. Probably more if they live in Klang Valley, Penang or JB. In 5-10 years, those in the age bracket with about RM50 thousands in their EPF account vintage folks will retire with only RM278 monthly income. That is if they don’t spend it at one go for umrah or pay up their housing or personal loan upfront. Even if we have double of that amount, RM1000 a month is not a lot.
Why am I sharing this? Because, where we are headed at our current rate, it’ll be way way worse than this. Lots of the folks in their 30s and 40s are still paying for student debt (PTPTN), fresh graduates have upwards of RM40 thousand in student loan alone. Most will have taken personal loan for marriage (I took out RM15 thousands loan for my marriage back in 2005. Then there’s car loan and credit card outstanding balances and many other loans probably.
We may ended up not having anything saved for out retirement. If we are part of the 67% of people that have less than RM50 thousands in our accounts by the time we are 50 years old then we need a miracle to be able to retire comfortably.
Remember that current adults and later our kids will not have it easy either. Even now people in their twenties are having a hard time to make enough money for themselves. Fresh graduates are doing menial jobs and paid at just slightly above minimum wage of RM1400. These are salary for folks working in fast food joints and restaurants. They don’t even have enough for themselves. More than 60% of graduates are unemployed in the first year after graduation. In total there are more than 500,000 adults are unemployed in the country. We don’t need statistics to tell us if these are younger folks or older folks.
So let’s be better prepared with our finances to better take care of our parents. Be better to prepare our kids so they fared better in the economy. Be prepared so we retired comfortably and won’t burden our parents nor our kids nor their kids.
If we aren’t prepared, we will be living with our kids later, together with their kids and their kids’ kid all in the same home. Singapore folks seemed to be ready and way ahead of us for this, for better or worse.
Peace be unto all.
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