With the oil price going up the roof, the domino effect will eventually spiral down to the consumer products and sooner or later inflation will rise like hell. Unfortunately, the malaysian average salary remains the same and so does our EPF contribution. Bank Negara has announced that the inflation can rise to 5% this year due to the recent oil price increase. The effect of inflation can be simplifiy like this. If you have RM1,000 locked in your EPF today, assuming we have an average of inflation of 2% for the next 36 years, your money is worth RM500 by then. Going by the average of return from EPF since 1980's till now, the average return is only at 5%-6%. That is not enough for our money to keep up with the inflation. That also means as you retired, your supposed-to-be retirement money can only lasts for 5 to 6 years only as your money has decreased in value. This is an alarming fact for all Malaysians and should be taken seriously. Definitely we would not want to retire at the age of 55 and only to realise that we have to work again at 60.
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