How Much Will You Need Per Month For Retirement?
If you ask how much it costs per month during retirement, the answer is almost always: “It’s complicated.” There is no definitive figure because everyone has a different life and financial situation to consider.
What if you haven’t met your financial goals? What if you’ve exceeded them? Do you know the kind of retirement you’re looking for? Will you start a business, travel every year, or go back to school?
In December 2024, the Employees Provident Fund (EPF) launched its updated Belanjawanku 2024/2025 guide alongside a new Retirement Income Adequacy (RIA) Framework, replacing the single-tier RM240,000 benchmark that had been in use for years. The new framework introduces three tiers of retirement savings targets, reflecting different lifestyle aspirations:
According to EPF’s Belanjawanku 2024/2025 guide, a single elderly person living in the Klang Valley needs approximately RM2,690 per month to maintain a reasonable standard of living in retirement, the basis for the Adequate Savings tier. This guide now covers 12 major cities across Malaysia and is updated annually.
Despite this progress, as of end-2025 only 41.2% of active EPF members in the formal sector had met even the Basic Savings benchmark for their age group, meaning 4.42 million workers remain behind. Planning early and intentionally has never been more important.
How Do You Know How Much You Will Need At Retirement?
Someone earning RM20,000 a month will have very different retirement needs compared to someone earning RM5,000. To bring this abstract question down to earth, we can look at retirement costs through the lens of Malaysia’s income classification groups.
Note: The Malaysian government began phasing out the B40/M40/T20 classification in 2024 in favour of a net disposable income approach via PADU (the Central Database Hub). However, the most recent household income data from DOSM remains from the 2022 Household Income and Basic Amenities Survey, and these figures continue to be widely referenced.
B40
According to DOSM’s 2022 survey, the average household income of the B40 group was RM3,401. Using the standard rule of thumb that you need at least two-thirds of your last drawn income to maintain your current lifestyle in retirement:
*Malaysia’s CPI has averaged closer to 3% annually in recent years, higher than the 2% used in older estimates. This makes inflation-proofing your retirement even more critical.
M40
The average M40 household income in 2022 was RM7,971, with the income range for this group spanning RM5,251 to RM11,819 per month.
T20
DOSM puts the average T20 household income at RM19,752 in 2022, with the threshold beginning at RM11,820 per month.
A Minimalist Approach To Retirement
TThe simplest way to plan your retirement costs is to aim to maintain your current lifestyle — it’s what you’ve been doing for years, so the numbers are familiar. That said, some retirees deliberately choose a leaner lifestyle, which can significantly reduce the savings required.
Common lifestyle adjustments in a minimalist retirement include:
- Eating out less frequently and cooking at home more
- Downsizing to a smaller property to reduce maintenance and utility costs
- Switching to a more fuel-efficient or electric vehicle, or going car-free
- Cutting entertainment subscriptions and memberships
- Limiting holidays to domestic or nearby destinations
Here’s an updated estimate of what a modest but comfortable retirement might look like per month, assuming no outstanding debt:
This figure aligns closely with EPF’s Belanjawanku 2024/2025 guide’s estimate of RM2,690/month for a single retiree, a useful reality check.
Starting A Business In Retirement
Not every retiree wants to stop working entirely. Many start small passion projects or side businesses, whether to supplement income, stay mentally active, or chase a long-held dream. If you go this route, the key principles remain the same as ever: keep startup costs low and treat it as income supplementation, not a replacement for your retirement fund.
Minimise Risk
At this stage of life, preserving your nest egg matters more than chasing upside. Keep initial capital low and avoid taking on debt to fund the venture. A home-based business, baking, tutoring, crafts, consulting, is often ideal because overheads are minimal.
For example, a home-based cake business might cost:
Supplement, Not Replace
Even two orders a week at RM50-RM120 each can bring in RM400-RM960 a month, a meaningful cushion on top of EPF withdrawals. As your reputation grows, so can your income. The goal isn’t to rebuild a career; it’s to add financial and personal fulfilment to your retirement years.
Travelling and Going Back to School
For many Malaysians, retirement is finally the time to see the world or pursue an education that career and family responsibilities made impossible. These aspirations are achievable, but they require deliberate planning.
Using the two-thirds rule, let’s estimate for someone whose last drawn salary is RM5,700:
For travel, the math is similar, decide how many trips you want to take per year and at what budget, then add that figure to your annual retirement cost before calculating your total savings target. A RM10,000 overseas holiday each year adds RM200,000 to a 20-year retirement fund at today’s prices.
Conclusion
There is no single right answer to how much you’ll need per month in retirement, it depends on your lifestyle, health, aspirations, and how early you start saving. What has changed significantly is the benchmark: EPF’s updated RIA Framework now sets RM390,000 as the minimum (Basic) savings target by age 60, and RM650,000 for an adequate retirement income of around RM2,690 per month.
With rising inflation, longer life expectancy, and a large proportion of Malaysians still falling short of even the Basic Savings target, the urgency to plan early and contribute consistently has never been greater. Whether you’re aiming for a minimalist retirement or an active one filled with travel and new experiences, the time to start is now.
This article has been updated in April 2026
