New KWSP Savings Guide: Are You on Track for Retirement?
by Hong Yuan
Mar 28, 2025
at 1:46 PM
Retirement may seem far away, but early planning is crucial. Recently, the Employees Provident Fund (KWSP) updated its savings guideline based on the RIA (Retirement Income Adequacy) Framework, and this revision will significantly impact every member’s retirement fund. Whether you are new to the workforce or a seasoned employee, understanding these new standards is essential to ensure a worry-free retirement.
EPF Savings Standard Increased to RM390,000
According to KWSP’s latest announcement, the minimum EPF savings standard will increase from RM240,000 to RM390,000 to ensure members can sustain at least 20 years of basic living expenses after retiring at 60. This adjustment will be implemented in three phases:
By January 1, 2026, savings should reach RM290,000
By January 1, 2027, savings should reach RM340,000
By January 1, 2028, savings should reach RM390,000
EPF Savings Goals Under the RIA Framework—Which One is Yours?
To help members better understand their savings needs, KWSP has classified the savings targets into the following three tiers under the RIA (Retirement Income Adequacy) Framework:
1. Basic Savings (Simpanan Asas) – RM390,000
Suitable for retirees aiming to maintain basic living expenses
Covers essential costs such as housing, daily food expenses, and basic healthcare
Covers basic expenses while allowing for hobbies and leisure activities such as travel and fitness
Provides better medical coverage to prepare for future health-related expenses
3. Enhanced Savings (Simpanan Dipertingkat) – RM1.3 million
Achieve true financial freedom without worrying about expenses
Enjoy luxuries such as world travel, supporting family, and investing in a higher quality of life
RIA Framework Table
Why Did KWSP Introduce the RIA Framework?
1. Rising Cost of Living
With inflation, previous savings standards are no longer sufficient to meet real-world expenses. For example, what RM100 could buy 10 years ago may now cost RM150 or more. Raising the savings threshold ensures that members can maintain their standard of living in the future.
2. Increasing Life Expectancy
Advancements in medical technology have led to longer life spans, meaning retirees will have extended years without income. Without adequate savings, financial difficulties may arise. The RIA Framework ensures members have sufficient financial security for an extended retirement period.
3. Higher Quality of Life Expectations
Retirement is no longer just about survival but about living well. Many aspire to maintain a healthy diet, access quality healthcare, and engage in fulfilling activities. The revised savings standard under the RIA Framework encourages members to plan ahead and create more opportunities for their golden years.
Retirement planning is not just about reaching a number; it’s about ensuring peace of mind and the lifestyle you desire. By saving consistently and making informed financial decisions, you can build a comfortable and worry-free retirement. Start planning today so you can enjoy your golden years without financial stress.
