As a compromise, set 60 for full EPF withdrawal age

LETTERS There is merit in the World Bank’s proposal to raise the EPF withdrawal age to between 65 and 70. The primary motivation for this proposal is the issue of insufficient savings among the retirees.

Withdrawal at the current level of 55 years could mean faster depletion of their financial resources, given the fact that the average lifespan has increased.

Then the risk of poverty in old age increases. By delaying the withdrawal age, the system effectively locks up the funds for a longer period, thereby increasing the final payout.

An extra five to 10 years can result in significantly larger final retirement among the retirees.

But there is also merit in retaining withdrawal at 55.

For many Malaysians, particularly those in the middle and lower-income brackets, their EPF savings are a vital financial tool to manage significant costs associated with early retirement and supporting children.

They can do this if they are able to withdraw their savings at age 50 (one third) and 55 in full.

They use their EPF savings to fund early retirement plans, start small businesses, or simply enjoy their golden years with peace of mind.

If a person officially retires at 60 and must wait at least another five years to withdraw his savings, he or she will have to depend on strained resources.

And so, what could be the compromise?

Although the government has not indicated that it will follow or put on hold the suggestion by the World Bank, it is proposed that a compromise solution could be raising the full withdrawal age to 60, instead of 65 to 70.

Whatever solution is finally implemented, there must be some flexibility to ensure that the welfare of the elderly citizens is not compromised but safeguarded.

TAN SRI LEE LAM THYE

Kuala Lumpur

The views expressed in this article are the author’s own and do not necessarily reflect those of the New Straits Times

© New Straits Times Press (M) Bhd

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