EPF Releases Belanjawanku 2024/2025 And Retirement Income Adequacy Framework
KWASA DAMANSARA, 12 December 2024: The Employees Provident Fund (EPF) today launches the Belanjawanku 2024/2025 and Retirement Income Adequacy (RIA) Framework, aimed at offering Malaysians a comprehensive monthly expenditure guide while revising the recommended savings levels from a single-tier savings benchmark to a three-tier savings framework.
Since 2019, the EPF and the Social Wellbeing Research Centre (SWRC) at the University of Malaya have developed the Belanjawanku Guide to estimate the minimum monthly expenses needed for a decent living standard. Initially focused on the Klang Valley, the guide now covers 11 other major cities in Malaysia and is updated yearly to reflect current living costs. It serves as a practical tool for households and a valuable reference for policymakers. The Belanjawanku Guide has also guided the review of EPF’s Basic Savings amount and supported the development of the new RIA Framework, which builds on the Basic Savings framework introduced in 2008.
RIA Framework Helps Members Set Savings Targets
Set to launch in January 2026, the RIA framework allows members to set savings targets that reflect different retirement lifestyles and aspirations. This approach emphasises the importance of viewing EPF savings as a source of ongoing income, helping members to understand savings they will need to sustain themselves during retirement.
The RIA Framework introduces a three-tier savings framework:
- Basic Savings and Income, covering essential retirement needs;
- Adequate Savings and Income, providing a reasonable standard of living during retirement;
- Enhanced Savings and Income, supporting greater financial security and independence for a higher quality of life.
The RIA Framework focuses on the concept of both savings and retirement income security. Based on the Belanjawanku 2024/2025, a single elderly person requires approximately RM2,690 monthly (“Adequate Retirement Income”) to maintain a reasonable standard of living in retirement.
The new three-tier RIA Framework will be anchored on the Adequate Retirement Income as determined by Belanjawanku from time to time:
- Adequate Savings Level: Benchmarked against the monthly expenditure of a Senior Single individual in the Klang Valley as outlined in the Belanjawanku 2024/2025 Guide (RM2,690 per month), multiplied by 240 months (reflecting the average life expectancy of Malaysians) and rounded to the next RM10,000, equivalent to RM650,000.
- Basic Savings Level: 60% of Adequate Savings amount (RM390,000).
- Enhanced Savings Level: 2 times of Adequate Savings amount (RM1.3 million).
The framework encourages a monthly drawdown for 20 years, aligned with average life expectancy in Malaysia. To illustrate, the different levels of savings will translate into the following at Retirement Age:
- Adequate Savings Level (RM650,000): Enables monthly withdrawals starting at RM2,708 in year one, growing to RM7,389 by year 20.
- Basic Savings Level (RM390,000): Supports monthly withdrawals of RM1,625 in year one, growing to RM4,434 by year 20.
- Enhanced Savings Level (RM1.3 million): Provides monthly withdrawals of RM5,417 in year one, increasing to RM14,779 by year 20, for a more comfortable retirement.
Transition Period for New Basic Savings Level
To ensure a smooth transition, the current Basic Savings level of RM240,000 will be increased gradually by RM30,000 each year over a five-year period, as follows:
- RM270,000 at age 60, effective 1 January 2026
- RM300,000 at age 60, effective 1 January 2027
- RM330,000 at age 60, effective 1 January 2028
- RM360,000 at age 60, effective 1 January 2029
- RM390,000 at age 60, effective 1 January 2030
Future Adjustments to Reflect Cost of Living
The savings levels under the RIA Framework will be reviewed every five years and will be updated accordingly based on the Belanjawanku Guide. This is to ensure that the RIA Framework remains relevant to current conditions, taking into account inflation and economic changes.
Flexibility for Members With Excess Savings
The withdrawal facility for savings in excess of RM1 million, which provides members the flexibility to manage their surplus funds, will be aligned with the Enhanced Savings threshold. This transition will be implemented gradually through annual increments of RM100,000, as follows:
- RM1.1 million effective 1 January 2026
- RM1.2 million effective 1 January 2027
- RM1.3 million effective 1 January 2028
In addition, under the Members Investment Scheme (MIS), members may transfer up to 30% of their savings in Akaun Persaraan exceeding the Basic Savings by age, to fund management institutions appointed by the EPF. This transfer will be based on the updated Basic Savings Schedule, effective 1 January 2026 (Table 1).
Table 1: New Basic, Adequate and Enhanced Savings Levels
| Age | New Basic Savings RM390,000 at age 60 |
Adequate Savings RM650,000 at age 60 |
Enhanced Savings RM1,300,000 at age 60 |
|---|---|---|---|
| 18 | 1,400 | 1,500 | 2,500 |
| 19 | 1,700 | 1,800 | 3,100 |
| 20 | 2,200 | 2,300 | 3,900 |
| 21 | 2,800 | 3,000 | 5,000 |
| 22 | 5,800 | 6,400 | 10,800 |
| 23 | 9,200 | 10,100 | 16,700 |
| 24 | 12,300 | 14,100 | 24,300 |
| 25 | 15,900 | 19,000 | 30,700 |
| 26 | 19,800 | 23,400 | 40,900 |
| 27 | 23,800 | 28,600 | 51,200 |
| 28 | 28,300 | 34,500 | 62,800 |
| 29 | 33,000 | 40,700 | 72,800 |
| 30 | 38,000 | 47,500 | 85,400 |
| 31 | 43,400 | 54,800 | 99,100 |
| 32 | 49,100 | 62,700 | 114,000 |
| 33 | 55,100 | 71,200 | 129,000 |
| 34 | 61,400 | 80,300 | 147,000 |
| 35 | 68,100 | 90,000 | 165,000 |
| 36 | 75,100 | 100,000 | 185,000 |
| 37 | 82,600 | 111,000 | 206,000 |
| 38 | 90,400 | 123,000 | 229,000 |
| 39 | 98,600 | 136,000 | 253,000 |
| 40 | 107,000 | 149,000 | 279,000 |
| 41 | 116,000 | 164,000 | 305,000 |
| 42 | 125,000 | 179,000 | 336,000 |
| 43 | 135,000 | 195,000 | 368,000 |
| 44 | 145,000 | 213,000 | 402,000 |
| 45 | 156,000 | 231,000 | 438,000 |
| 46 | 167,000 | 250,000 | 476,000 |
| 47 | 179,000 | 271,000 | 516,000 |
| 48 | 191,000 | 292,000 | 559,000 |
| 49 | 204,000 | 315,000 | 606,000 |
| 50 | 217,000 | 339,000 | 652,000 |
| 51 | 231,000 | 364,000 | 703,000 |
| 52 | 246,000 | 390,000 | 757,000 |
| 53 | 261,000 | 417,000 | 813,000 |
| 54 | 277,000 | 446,000 | 873,000 |
| 55 | 294,000 | 476,000 | 935,000 |
| 56 | 312,000 | 508,000 | 1,000,000 |
| 57 | 330,000 | 541,000 | 1,070,000 |
| 58 | 349,000 | 576,000 | 1,140,000 |
| 59 | 369,000 | 612,000 | 1,220,000 |
| 60 | 390,000 | 650,000 | 1,300,000 |
As of October 2024, around 36% of active formal EPF members meet the existing Basic Savings level according to age, anchored on RM240,000 at age 55. While this percentage may be impacted with the new benchmarks in the medium term, the adjustments are essential to help members' savings keep pace with the rising cost of living and the current retirement age in Malaysia.
EPF Chief Executive Officer Encik Ahmad Zulqarnain Onn said, “The Belanjawanku Guide and RIA Framework are cornerstones to EPF’s purpose in building a better retirement future for all Malaysians. The guide helps average Malaysians navigate the challenges in managing household expenses while the EPF establishes a strong foundation for building adequate retirement savings.
“By offering a comprehensive view of monthly expenditure and introducing new savings benchmarks, we aim to guide our members toward achieving a dignified and fulfilling retirement. These initiatives not only underscore EPF’s commitment to adapting to evolving socioeconomic realities but also reflect our objective to stay relevant and responsive to changing times. Our goal is to ensure that no Malaysian is left behind in planning for a secure and meaningful future,” he added.
The Belanjawanku 2024/2025 can be downloaded for free from the EPF website at www.kwsp.gov.my. The Belanjawanku App can also be downloaded for free from Apple App Store, Google Play, and Huawei App Gallery.
Issued by
Editorial and Media Relations Unit
Corporate Affairs Department
12 December 2024
Note: The revision period for RIA has been updated to five years, and the transition to the new Basic Savings Level will also be implemented over a five-year period, with an annual increment of RM30,000, following approval from the Ministry of Finance (MOF).
About the Employees Provident Fund® (EPF®)
Established in 1951, the Employees Provident Fund® (EPF®) is a social security organisation and one of the leading retirement funds in the world dedicated to protecting members’ savings and delivering exceptional services. Committed to its purpose of building a better retirement future for Malaysians, the EPF has expanded its functions to encompass a comprehensive social wellbeing ecosystem. The EPF remains steadfast in its efforts to continually update and improve its services, ensuring a solid foundation for sustainable, holistic, and equitable wellbeing for all Malaysians.