Why Takaful is your essential line of defence for your future
In Malaysia today, in the shadows of the rising cost of living, one of the greatest financial risks quietly affecting the population is reaching retirement without enough savings to live on. For many Malaysians, especially those outside formal employment, surviving retirement without the Employees Provident Fund (EPF) is not just a possibility; it is already a reality.
Recent data paints a concerning picture. As of 2024, only 36% of active EPF members reached the basic savings threshold of RM240,000 at age 55, the minimum amount recommended by EPF to sustain a modest retirement lifestyle. It was also revealed that 81% of EPF members under 55 are expected to retire below the poverty line, with more than half having less than RM10,000 in savings.
When Retirement Doesn’t Mean Security
While EPF remains a pillar of Malaysia’s retirement system, it does not cover everyone. Even among those who do contribute, savings are often insufficient. Gig workers, small business owners, homemakers, informal workers, and individuals who withdrew heavily from EPF during the COVID-19 pandemic are among those who are less likely to have access to pensions and more likely to face retirement without the means to cover even basic needs like food, housing, or healthcare, let alone emergencies.
Without EPF or a pension, many of these individuals face the uncomfortable prospect of relying on children, community support, or even going without essentials like healthcare and medication. With the cost of living on the rise and electricity tariffs, food prices, and protection coverage creeping higher, the challenge of building financial security after 60 has never been more urgent.
According to the Malaysia Ageing and Retirement Survey (MARS), only 5.1% of senior citizens have EPF savings that would last beyond the age of 65; the financial pressure trickles down to their adult children, who are also facing their own financial challenges. As Malaysia’s old-age ratio continues to grow, it has become even more important to build a resilient future for current and future retirees.
Takaful: A Lifeline in Times of Need
In times of financial strain, households would understandably look for ways to trim expenses. Add in the increased contributions for protection plans, and many would be tempted to drop Takaful protection when money gets tight.
However, Takaful is not just another expense; it is one of the most critical forms of protections you can keep, especially when you no longer have a monthly pay cheque or EPF buffer. Medical costs are climbing steadily, and while public healthcare is available and affordable, it often comes with long waits and limited capacity. Cancelling your Takaful plan altogether may leave you and your family exposed to much greater financial risk in the long run.
Instead of cancelling your plan:
- Consider temporarily downgrading your coverage
- Switch to monthly payments to help improve your cash flow
- Explore affordable Takaful plans such as Ouch!’s Pusara Pro, which provides life protection from as low as RM4.13 per month. This affordable plan makes it possible even for low-income earners and retirees to gain protection.
Takaful provides coverage that helps to protect you and your loved ones financially in the event of death or total permanent disability; fund medical treatment through critical illness riders; and preserve your legacy via hibah – a shariah-compliant gift that ensures your family receives funds without delays. These alternatives ensure that you retain essential protection even during financially challenging periods. Keep your protection active, even if in a scaled-down form.
Let’s Retire with Dignity
As a Takaful firm, we believe that financial protection should be accessible and compassionate, whether you are just starting out or thinking ahead to retirement. Because true independence is not just about how much you have saved, but how well you are protected. Whether you are 30 or 60, the earlier you start planning, the more peace of mind you will have.
Even without enough EPF, you are not without options. Capitalise on the financial tools at your disposal to protect your future and your family’s well-being. A small monthly contribution today could mean dignity, security and peace of mind for your loved ones tomorrow.
Find out more about Pusara Pro by clicking here or download the Ouch! Takaful mobile app from the Google Play Store or Apple App Store today.
Disclaimer: The information in our blog articles and provided by our brand ambassadors/KOLs is for general insights only and not legally binding. We strive for accuracy but cannot guarantee the information’s completeness or reliability. For legal matters, consult official documents or contact an authorised Ouch! representative.