The World Bank has recommended that Malaysia consider raising the Employees Provident Fund (EPF) withdrawal age to between 65 and 70 to help retirees maintain stronger and more sustainable savings. Currently, Malaysians can withdraw their EPF savings in full at age 55, but the World Bank notes that many exhaust their funds within three to five years, leaving them financially vulnerable.
The policy brief highlights Malaysia’s rapidly ageing population, predicting the number of citizens aged 65 and above will double between 2020 and the mid-2040s. Raising the withdrawal age could allow savings to grow longer through compound returns, extend the longevity of retirement funds, align Malaysia with global trends, and reduce long-term fiscal pressure on the social protection system.
The World Bank cautions that simply increasing the withdrawal age is not enough. Reforms should also improve EPF coverage for informal workers, protect those in physically demanding jobs, enhance financial literacy, and communicate changes early to allow adequate planning.
If adopted, Malaysians may need to wait longer before accessing full EPF savings, but this could ensure healthier retirement balances and reduce the risk of outliving their funds. The proposal may spark debate, particularly among those relying on early withdrawals for family support, debt repayment, or early retirement.
