Financial Awareness Vital as Malaysians Face Retirement Challenges
With life expectancy in Malaysia now averaging 76.6 years, coupled with inflation and rising living costs, it is more important than ever for Malaysians to be financially prepared early on. According to Yew Yee Tee, Executive Director and General Counsel of the Securities Commission Malaysia (SC), one of the most significant challenges facing the nation is the lack of adequate retirement savings.
Speaking at InvestSmart Fest 2024, Yew highlighted that only 33% of Employees Provident Fund (EPF) members had reached the basic retirement savings target of RM240,000 in 2023, a figure meant to support 20 years of retirement. This statistic underscores the financial gap many retirees face, particularly in a post-pandemic world influenced by economic uncertainties.
Insufficient Retirement Savings: A National Concern
A recent SC study revealed troubling statistics on retirement readiness:
- 54% of respondents believed their current savings were insufficient for retirement.
- Only 16% felt they had enough to last more than 20 years.
- A concerning 18% indicated their savings could sustain them for just five years or less.
With retirement savings posing such a challenge, Yew emphasized the importance of financial literacy. Malaysians must become more proactive in managing their long-term savings and investments, ensuring they are adequately prepared for the future.
The Rising Threat of Scams and Unlicensed Activities
In the face of growing technological advancements, the SC has observed an alarming rise in scams and unlicensed activities. In 2023, the SC recorded 3,262 complaints and enquiries, marking a 321% increase since 2019. As of the third quarter of 2024, the number has already risen to 3,380, reflecting a 28% increase year-on-year. These scams often employ sophisticated techniques, such as deepfake technology.
Yew warned that most scams are facilitated through mule accounts, where victims allow their bank accounts to be used for illicit transactions. She advised the public against renting out bank accounts for such purposes, noting that enforcement actions had been taken against 19 mule account holders since 2022, resulting in hefty fines.
The Risks of Following “Finfluencers”
As more people turn to social media for financial advice, Yew cautioned about the growing influence of “finfluencers”—social media figures offering investment tips. While social media is a powerful platform for sharing experiences, it can be risky to follow financial advice from unlicensed individuals without conducting independent due diligence.
“Investors should be aware of the risks of relying on unqualified influencers for financial guidance,” Yew added. These finfluencers may not have the necessary expertise, and in some cases, offering financial advice without a license could violate regulations.
Conclusion
As Malaysia continues to navigate the challenges of retirement planning and the digital financial landscape, it is essential for individuals to prioritize financial literacy. Ensuring adequate retirement savings, staying vigilant against scams, and being cautious with financial advice from unlicensed sources will be key in securing financial well-being in the years to come.
