MALAYSIANS have voiced somewhat mixed reactions to the World Bank’s proposal for Malaysia to raise the Employees Provident Fund (EPF) withdrawal age from 55 to between 65 and 70, a move it argues would strengthen the country’s social protection system amid rising life expectancy.
Many older contributors, however, are pushing back against the suggestion. Personal driver R. Ravi, 62, told The Star recently that the current withdrawal age should remain at 55, citing family and financial responsibilities.
“When we reach a certain age, there are other priorities that we need to attend to, like planning for our children’s wedding or arranging money for them to study overseas,” said Ravi, who has contributed to the EPF since he was 18.
“We shouldn’t be restricted from taking out the money sooner,” he added, noting that the existing option to withdraw one-third of savings at 50 already provides a reasonable balance.
Retiree, who only wanted to be known as Jennifer, 61, also disagreed with the World Bank’s suggestion, saying that many depend on their savings for their children’s education and other family needs.
“I took out money from my EPF to pay for my children’s education in college and also to pay for my expenses. My daughter recently got a new car; I also used some money to pay for the down payment,” she said.
Jennifer believes the withdrawal age should stay at 55, allowing seniors to enjoy early retirement and use their funds freely.
Economists, however, have urged careful and phased implementation.
Prof Mohd Nazari Ismail of Universiti Malaya said, “It would be unreasonable to extend the EPF withdrawal age to 65 if the official retirement age remains at 60.
“Retirees need access to their savings to supplement their pension.”
He warned that restricting access could “erode public trust” and push retirees into debt, calling instead for stronger financial literacy programmes.
Bank Muamalat chief economist Dr Mohd Afzanizam Abdul Rashid supported a moderate revision. “Raising the withdrawal age to 60 makes sense as it would align with the current retirement age,” he said, suggesting that any adjustment be introduced gradually on a voluntary basis.
Sunway University economist Prof Yeah Kim Leng agreed that extending the withdrawal age could improve retirement security.
“Given that many contributors deplete their savings within three to five years, a compromise could be to convert half the amount into an annuity account for continued financial support,” he said, adding that flexibility should remain for special cases.
Senior economic consultant Samirul Ariff Othman of Global Asia Consulting said the World Bank’s recommendation is “logically grounded in macroeconomic realities,” citing Malaysia’s ageing population and low retirement adequacy levels.
However, he cautioned against a rigid approach. “Implementation must be phased and reflect the actual capacity of older workers to remain employed,” he said.
Independent analyst Nazri Hamdan said Malaysia’s average life expectancy of 75–78 years justifies reviewing the current system.
“If one retires at 55 with RM300,000 in savings, it only lasts about 12 years at RM2,000 a month. Extending the contribution period to 65 could increase savings to around RM500,000 — far more realistic given current demographics,” he explained.
Nazri also warned that Malaysia faces a growing risk of elderly poverty, as nearly half of citizens aged 70 and above fall within the low-income category.
“If EPF funds are depleted and they can no longer work, the only options left are depending on their children or government aid — and that’s unsustainable,” he said.
The World Bank’s latest study, ‘Should Malaysia Expand Its Social Pension? Global Evidence, Design Issues and Options’, argues that Malaysia’s current withdrawal age of 55 is too low for an ageing nation. It recommends raising the age gradually to between 65 and 70 to ensure the sustainability of the country’s pension framework while aligning it with improved healthy life expectancy. - November 1, 2025
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