If You're 25 Today, Will RM1.5 Million Be Enough When You Retire in 2061?

RM1.5 million in 2061 won't buy what RM1.5 million buys today. If you're 25 now, that impressive figure you're aiming for will have the purchasing power of just RM632,000 by the time you actually need it. The math is simple but sobering: 35 years of inflation will eat away nearly 58% of your retirement fund's buying power.

EPF recently introduced its Retirement Income Adequacy Framework with three tiers by age 60:

• Basic Savings (RM390,000)
• Adequate Savings (RM650,000)
• Enhanced Savings targeting RM1.3-1.5 million

These numbers look solid on paper. But when you understand what they'll actually buy three decades from now and the reality that only 36% of EPF members at 55 currently meet even the old basic savings threshold of RM240,000, the picture changes dramatically. Let's break down what these numbers truly mean, whether EPF alone is sufficient, and most importantly, what you can actually do about it.

Retirement isn't a lump sum, it's a monthly income for 20+ years

When we talk about retirement savings, it's easy to fixate on the final number. But retirement isn't about having RM1.5 million sitting in your account on the day you turn 60. It's about generating enough monthly income to sustain you for the next two decades or more.

Why 20 years? Malaysian life expectancy currently sits at 75.2 years overall, with women living to nearly 78 and men to about 73. If you retire at 60, you're looking at funding approximately 18-21 years of living expenses. EPF's framework is designed around this 20-year drawdown period, which is why the math works the way it does.

Under EPF's Retirement Income Adequacy Framework, the Adequate Savings tier of RM650,000 would provide withdrawals starting at RM2,708 per month in year one, gradually increasing to RM7,389 by year 20 as your remaining balance continues earning returns.

The Enhanced tier, which many financial planners suggest targeting at RM1.5 million, would start at approximately RM5,417 per month, rising to RM14,779 by the final year.

So what does RM5,417 monthly actually cover? According to EPF's Belanjawanku 2024/2025 Guide, a single elderly person in Klang Valley needs approximately RM2,690 per month for a reasonable standard of living. This covers housing, food, transport, utilities, healthcare, and social participation — not luxury, just adequacy. At RM5,417 monthly, you'd have breathing room for healthcare contingencies, helping family members, or simply enjoying life without constant worry.

There's also the well-known 4% withdrawal rule used globally: withdraw 4% of your nest egg annually, and your capital should last 30+ years. Applied to RM1.5 million, that's RM60,000 per year or RM5,000 per month, closely aligned with EPF's Enhanced tier calculations.

Here's the problem: only 36% of EPF members reaching 55 currently meet even the old Basic Savings threshold of RM240,000. That means nearly two-thirds of Malaysians are entering retirement severely underfunded.

What RM1.5 million will actually be worth in 2061

Numbers like RM1.5 million sound impressive because we're anchoring to today's prices. But inflation doesn't sleep. Your target amount stays the same while everything it can buy shrinks year after year.

Malaysia has averaged approximately 3% inflation from 1960 to 2024, though Bank Negara projects a more moderate 2.0-2.5% in the near term. Using a conservative average of 2.5% over your 36-year horizon, the inconvenient truth is that, at 2.5% annual inflation, prices roughly double every 29 years. Over 35 years, RM1 today would need to become RM2.37 just to buy the same thing. Flip that around:

That's a 58% erosion of your retirement fund's real value. You'll have RM1.5 million on paper, but it will buy what RM632,000 buys today. Spread over 20 years of retirement, that's just RM2,634 per month in today's ringgit, barely enough for one person under EPF's own Belanjawanku benchmark of RM2,690.

Abstract millions are hard to grasp, so let's make this concrete with everyday examples. According to DOSM's Consumer Price Index analysis, between 2011 and 2024 — just 13 years — Malaysian food prices increased dramatically:

These aren't outliers. Food inflation consistently outpaces headline inflation because it tracks what everyday Malaysians actually spend money on. When your grandparents tell stories about nasi lemak costing 50 sen in the 1970s, this is exactly the phenomenon they're describing and it will continue through your retirement years.

Let's make this personal by using real annual expenses and actual inflation data for each category. Different expenses inflate at different rates — medical costs rise much faster than general inflation, while housing/utilities track closer to the average:

Expense Category	Today's Value (2026)	10-Year Avg Inflation	In 2061 (might be in reality)
Medical Expenses (Specialist visits, supplements, procedures)	RM3,500/year	12% (BNM 2022-2024)	RM184,800/year
Food & Groceries (Home cooking + dining out for 2)	RM21,600/year	3.1% (CEIC 2006-2025)	RM62,900/year
Housing & Utilities (Maintenance, water, electricity, internet)	RM15,700/year	2.3% (DOSM 2015-2024)	RM34,800/year
Transport (Fuel, maintenance, public transport)	RM7,300/year	1.8% (DOSM 2015-2024)	RM13,600/year
Personal Care & Social (Clothing, recreation, social activities)	RM4,800/year	2.0% (FocusEconomics 2015-2024)	RM9,600/year
TOTAL Annual Cost	RM52,900	—	RM305,700
20-Year Retirement Cost	RM1,058,000	—	RM6,114,000
Average Monthly Cost	RM4,408	—	RM25,475

Notice how medical costs (12% annually) grow nearly 5x faster than housing costs (2.3%). By 2061, healthcare alone could eat RM184,800/year, more than triple your entire current annual expenses. And these projections use Malaysia's actual reported medical inflation rates over the past decade—not a theoretical estimate.

So what does this mean for your retirement fund?

	Your Reality	EPF Basic	EPF Adequate	EPF Enhanced
Avg. Annual expenses at retirement	RM305,700	RM19,400	RM32,300	RM64,600
20-year retirement cost	RM6.11 million	RM390,000	RM650,000	RM1.3 million
How long it lasts	20 years	~1.3 years	~2.1 years	~4.3 years

Here's the uncomfortable question: Can you maintain your current lifestyle throughout retirement? Or will you have to cut back?

So the question isn't whether RM1.5 million sounds like enough. The question is: will RM632,000 in today's purchasing power give you the retirement you imagine when you have to live off RM2,634 monthly?

Think about what "cutting back" actually means at age 70. It's not skipping your Netflix subscription, it's choosing between buying your medication or visiting your grandchildren. It's telling your spouse you can't afford that trip you've been planning for years. It's watching your savings drain faster than expected because you didn't account for how expensive healthcare becomes as you age.

EPF's targets aren't wrong, they're just based on simplified assumptions. A single average inflation rate can't capture what your retirement will actually cost when medical expenses inflate at 12% while EPF calculates using 2.5%. The composition of your expenses matters enormously, and healthcare will dominate your budget precisely when you can least afford to cut back on it.

Why relying solely on EPF is a risky bet

EPF is an excellent foundation, one of the best mandatory retirement systems in the region. But treating it as your only retirement plan can be risky over time. Let's examine three critical gaps.

The expectation versus reality gap starts early

EPF's new Retirement Income Adequacy Framework sets aspirational benchmarks by age. For the Enhanced tier (targeting RM1.5 million by 60), they expect members to have RM16,700 by age 23 and approximately RM99,100 by age 30. Even for Basic Savings, the age-30 target under the previous framework was RM35,000.

Now consider the math: to accumulate RM16,700 by age 23, you'd need to start working at 18, earning approximately RM3,500-4,000 per month with consistent contributions. The reality? Fresh Malaysian graduates typically earn between RM2,500 and RM3,500 monthly, and most don't start formal employment until 22-23 after completing their degrees.

The median EPF balances tell the real story:

• Under 25: RM3,372 (versus RM9,200-16,700 targets)
• Age 25-29: RM9,642
• Age 30-34: RM15,572 (versus RM35,000-99,100 targets)
• Age 35-39: RM24,711

According to Khazanah Research Institute, over 90% of EPF members under 30 don't have enough to meet even basic savings targets. The gap at age 30 is particularly striking: the median member has RM15,572 when they should have RM35,000, a shortfall of nearly RM20,000.

Picture Sarah, 30 years old, with an EPF balance of RM15,572 (the median for her age group). To reach the old Basic Savings target of RM240,000 by age 55, she needs to close a RM19,428 gap on top of her regular contributions. That translates to approximately RM78 extra monthly for 25 years — achievable, but only if she knows the gap exists and takes action.

These benchmarks aren't meant to discourage you. They're aspirational targets based on ideal scenarios. The point is this: knowing your gap is the first step to closing it.

Life events drain EPF before retirement arrives

EPF's flexibility is one of its greatest strengths — you can withdraw for housing, education, and medical emergencies through Account 2 (now Akaun Sejahtera). These are essential life milestones and necessities, not luxuries. Owning a home, sending your children to university, and taking care of your health are legitimate priorities that deserve your resources.

But here's what's important to understand: every withdrawal has an opportunity cost in the form of lost compound growth. This isn't about guilt, it's about making informed choices. When you know the trade-off, you can plan around it.

Consider three common scenarios using EPF's historical 10-year average return of 5.98%:

• Owning a Home at age 30: You withdraw RM50,000 for a down payment. Over the next 25 years until retirement, that RM50,000 would have grown to approximately RM177,000 in your EPF. The opportunity cost: RM127,000 in retirement wealth.
• Higher Education at age 35: You withdraw RM30,000 for your child's university fees. Over 20 years, that becomes RM95,000 in forgone retirement growth—more than triple your withdrawal amount.
• Medical Care at age 45: You withdraw RM20,000 for healthcare needs. Even with just 10 years remaining, that RM20,000 would have become RM36,000 by retirement.
• Combined impact: These three essential expenses totalling RM100,000 cost you approximately RM308,000 in lost retirement wealth.

The takeaway isn't "don't withdraw for important needs." The takeaway is: create a separate, untouched retirement fund alongside EPF so that when life happens—and it will—your core retirement security remains intact. Use EPF's flexibility for life's necessities while building a parallel fund that compounds undisturbed for decades.

Diversification creates opportunity, not just safety

EPF has delivered solid returns, averaging 5.98% over the past decade and consistently beating its guaranteed minimum of 2.5%. For a mandatory savings vehicle, this is commendable. But there's an opportunity cost to having all your retirement eggs in one basket.

Additional investing with equity exposure has historically delivered 7-10% annual returns over long periods (based on global equity market historical performance and Malaysian equity indices like the FTSE Bursa Malaysia KLCI). The difference between 6% and 8% sounds small, but compound interest makes it massive:

RM300 monthly for 36 years:

• At 6% returns: approximately RM360,000
• At 8% returns: approximately RM570,000

That's a RM210,000 difference. Nearly 60% more wealth from just 2% higher annual returns. The power of compounding means small differences in return rates create enormous gaps over decades.

EPF itself recognises this through its Members Investment Scheme (MIS), which allows members to invest up to 30% of savings exceeding Basic requirements in approved unit trust funds. This acknowledgment from EPF, that members benefit from diversification is telling.

Here's the good news: starting early changes everything

If the numbers above feel overwhelming, here's the reframe: you don't need a windfall. You don't need to suddenly find RM500 or RM1,000 monthly. Starting early with modest amounts makes a dramatic difference over 35 years. Time is the magic ingredient that turns small, consistent contributions into significant wealth.

Closing the gap is more achievable than you might think. Let's walk through three scenarios based on where you are today and how your age connects to how much risk you can take with your investments.

Want to understand exactly how to build a portfolio that matches your age and risk profile? Read our complete guide: Building a Halal Investment Portfolio in Malaysia: From Saving to Investing

Now let's break down each scenario in detail:

If you're 25 today: time is your superpower (High Risk Tolerance)

• Why this matters: You have a 35-year runway. At your age, time is your single greatest asset. Small amounts invested consistently become massive sums through compounding. The difference between starting at 25 versus 30 is often measured in hundreds of thousands of ringgit. More importantly, you can afford to take more risk — if the market crashes 30%, you have decades to recover and benefit from the eventual rebound.
• How to approach it: Start with RM200-300 monthly, roughly 10% of a typical RM3,000 starting salary. Automate it so the money moves before you can spend it. Focus on Shariah-compliant equity portfolios that provide growth exposure appropriate for your long time horizon.
• What it achieves: RM300 monthly invested at 7% average returns for 35 years grows to approximately RM530,000. Combined with projected EPF savings of around RM800,000 (assuming steady career progression), you're looking at total retirement assets of RM1.33 million.
  
  Adjusted for inflation, that's approximately RM560,000 in today's purchasing power. Without the additional RM300 monthly investment, your EPF alone might provide only RM328,000 in real purchasing power. That extra RM300 monthly nearly doubles your retirement wealth.
• Where to invest: Look for platforms like Wahed that offer diversified Shariah-compliant portfolios with low minimum investments, easy automation features, and a specific focus on long-term retirement planning. The key is accessibility and consistency—you need something you'll actually stick with for decades.
• When to start: Now. Waiting until 30 costs you more than RM150,000 in potential growth. Every year you delay, you need to save more to achieve the same outcome.

If you're 35 today: the catch-up window is still open (Medium Risk Tolerance)

• Why this matters: Twenty-six years is still a significant runway. You're likely in mid-career with higher income than your 20s, which means more capacity to invest. This is your window to catch up before time constraints tighten. Your risk tolerance sits in the middle—you still need growth to reach your goals, but you can't afford to be as aggressive as someone in their 20s. You need balance.
• How to approach it: Target RM400-500 monthly, approximately 10-12% of a typical RM4,500 mid-career salary. Your allocation should balance growth and stability: roughly 60-70% in equity funds for growth, 30-40% in sukuk or cash equivalents for stability.
• What it achieves: RM500 monthly at 7% returns for 26 years grows to approximately RM362,000. Combined with projected EPF savings of around RM600,000, your total reaches RM962,000. More importantly, this creates a separate, untouched stream while EPF handles any emergency withdrawals that life throws at you.
• Where to invest: The same platforms work well here. As you approach 50, gradually rebalance toward more conservative allocations but at 35, you still have enough time to benefit from equity growth.
• When to start: Immediately. If RM500 feels too aggressive, start with RM300 and increase by RM50 every six months. Building the habit matters more than optimising the initial amount.

If you're 45 today: protection and growth both matter (Lower Risk Tolerance)

• Why this matters: With 16 years until retirement, you're in catch-up mode. These are typically your peak earning years, which creates opportunity, but the shorter timeframe means you can't afford significant losses. Your risk tolerance must be lower—protecting what you have becomes as important as growing it. A 30% market crash at this stage could derail your retirement plans if you're too heavily invested in stocks.
• How to approach it: Target RM800-1,000 monthly, approximately 15% of a typical RM6,000+ senior salary. Your allocation should be more conservative: 40-50% equities, 50-60% sukuk and stable instruments.
• What it achieves: RM1,000 monthly at 6% returns (reflecting the more conservative allocation) for 16 years grows to approximately RM246,000. Combined with projected EPF savings of around RM650,000, your total reaches RM896,000. Adjusted for inflation over 16 years, that provides roughly RM655,000 in purchasing power versus RM475,000 from EPF alone.
• Where to invest: Focus on capital protection, proven track records, and retirement-focused portfolios. Platforms like Wahed offer Shariah-compliant options that balance growth with stability, which becomes increasingly important as your timeline shortens.
• When to start: Now and review quarterly. As existing loans pay off (car, remaining mortgage), redirect those payments toward retirement investments.

See your own numbers with a retirement calculator

Everyone's journey is different. Your EPF balance, salary trajectory, and investment capacity are unique to you. That's why generic advice only goes so far.

Wahed's retirement calculator lets you input your actual numbers — current age, EPF balance, monthly contribution capacity—and see the real difference between relying on EPF alone versus adding supplementary investments. It shows projections in inflation-adjusted terms, so you understand actual purchasing power rather than nominal figures that look impressive but mislead.

The most valuable insight is often the comparison: seeing exactly how much additional wealth a modest monthly investment creates over your specific timeline. For many people, this visualisation is what transforms abstract concern into concrete action.

The choice is yours, but the math isn't optional

Let's bring this together. RM1.5 million in 2061 will have the purchasing power of only RM632,000 in today's ringgit. EPF's benchmarks—while well-intentioned—are aspirational targets that most Malaysians don't hit, given typical starting salaries of RM2,500-3,500 and inevitable life withdrawals for housing, education, and emergencies.

The solution isn't to abandon EPF. It's an excellent mandatory savings vehicle that provides guaranteed minimums and historically solid returns. The solution is to create a second, untouched income stream that compounds without interruption while EPF handles life's curveballs.

You can't control inflation. You can't control unexpected expenses. You can't control EPF's future performance. But you can control whether you have one income source in retirement or two. You can control whether you start today or keep waiting. You can control whether you accept the gap or take steps to close it.

Why bet your entire future on finding out thirty years too late, whether EPF alone is enough?

Start small. Start now. Let time do the heavy lifting. Your future self, enjoying retirement with genuine financial security rather than constant worry, will thank you for the decision you make today.

Platforms like Wahed make it simple to begin with whatever amount works for your current situation, automate your contributions, and build toward the retirement you actually deserve. The hardest step is the first one. Everything after that is just consistency.