Malaysia’s EPF just announced a 6.3% dividend for both the conventional and Shariah-compliant savings accounts for 2024. This is its highest payout since 2017, and a significant uplift from the 5.5% dividend rate the year before.
With a total distribution of RM73.24 billion, this marks a major milestone for Malaysia’s retirement savings.
A closer look at the EPF’s total investment income showed that it jumped 11% year-on-year to RM75 billion. This impressive growth comes on the back of recovering markets, a resilient economy, and solid portfolio management.
One supporting factor may be attributed to government initiatives under Budget 2024 and the Ekonomi MADANI framework, led by Prime Minister Dato’ Seri Anwar Ibrahim, which have helped attract foreign investments and spurred economic growth.
Are Malaysians Saving Enough?
As of 2024, the EPF had a total of 16.22 million members, with 8.78 million active contributors, making up 51% of Malaysia’s 17.32 million labour force. However, the real concern lies in how much Malaysians are actually saving for retirement.
By the end of 2023, the median EPF savings stood at just RM100,000—a figure that raises serious concerns. For retirees aged 60 and above, their average EPF savings are only around RM240,000.
Let’s put that into perspective, if a retiree needs to stretch this amount over 20 years, they would have just RM1,000 per month to survive on. That’s barely enough to cover the basics, and does not take into consideration future inflation.
This paints a worrying picture for retirement security in Malaysia. While EPF provides a safety net, Malaysian may need to do more if they want to retire comfortably.
Read Also: How To Save RM1 Million With EPF?
EPF Is Not The Only Way To Grow Your Retirement Nest Egg
But here’s a thought — there may be other ways to strengthen your retirement adequacy besides EPF. While EPF’s 6.3% dividend is impressive, some of Malaysia’s top blue-chip stocks also offer attractive yields for investors.
Beyond just dividend yields, many of these companies also allow you to benefit from the stronger Malaysian economy with share price appreciation.
Here are some blue-chip stocks that have delivered over 5% dividend yields in the past year. In the table below, you can see that bank stocks, such as CIMB Group Holdings Bhd has a 6.64% dividend yield, Maybank provided 5.97% yield, while RHB pays 5.88% yield. However, majority of their returns came from capital appreciation during the year.
| Company | Dividend Yield (Past 12 Months) | Stock Price Return (1 Year) |
| MISC Bhd | 5.17% | 2.8% |
| Petronas Dagangan Bhd | 5.33% | -5.1% |
| Maxis Bhd | 5.36% | -4.7% |
| Axiata Group Bhd | 5.62% | 1.3% |
| RHB Band Bhd | 5.88% | 18.9% |
| Malayan Banking Bhd | 5.97% | 14.1% |
| CIMB Group Holdings Bhd | 6.64% | 37.5% |
*Note: Data extracted from Bloomberg as per 12 March 2025.
Alongside potentially higher returns, it’s important to consider the risks when investing in stocks – even if they are considered blue-chip. Again, you simply need to look at the table above to see that stocks’ share price can go down as well – with Petronas Gagangan and Maxis Bhd losing nearly 5% of their value.
Investing in stocks is unlike growing your money with EPF, which guarantees stable annual returns and compounding growth. You will encounter volatility in share price. Individual stocks can also choose to lower their dividends if their operations do not support a high payout, or if want to invest it in other ways.
So, while investing in stocks can be rewarding, relying solely on them for retirement savings will carry risks. Without the stability of EPF, a poorly timed investment could mean setbacks in financial security, which is the last thing you’d want in retirement.
EPF vs. Stocks: Which Should You Choose?
While the EPF’s stable and consistent returns make it a great foundation for retirement savings, investing in blue-chip stocks offers an alternative for those looking to boost their passive income.
However, as we discussed, dividend yields alone don’t tell the full story. Stock price movements can significantly impact total returns, making direct investments in stocks riskier than EPF. The EPF will pay a minimum of 2.5% on your savings, while you can lose money with your stock investments.
While blue-chip stocks tend to be more stable than smaller companies, their prices can still fluctuate due to economic conditions, industry trends, and company performance. A well-timed investment in a strong-performing stock can significantly enhance returns, while a poorly timed entry can lead to losses, something that could be detrimental to long-term retirement planning.
The Best Of Both Worlds Through A Balanced Approach
Given these factors, choosing between EPF and direct stock investments isn’t just about comparing dividend yields. Investors should consider your own risk tolerance, financial goals, and the need for stability.
EPF provides peace of mind with guaranteed growth and compounded returns, making it a reliable choice for retirement savings. On the other hand, investing in high-dividend stocks offers the potential for better returns but requires careful selection and monitoring.
A well-balanced approach, combining the two investments to grow your retirement portfolio, might be a good strategy. You can maximise EPF contributions to ensure a stable foundation for retirement, while allocating a portion of savings into blue-chip dividend stocks will help generate additional income – especially if you have a long runway before your retirement.
Beyond blue-chips, more confident investors can also diversify further by considering other investment vehicles like real estate investment trusts (REITs), exchange-traded funds (ETFs) or even individual growth stocks.
You can even explore global stocks, in the US, Hong Kong or other stock markets. When doing this, you may want to keep brokerage costs low and invest with a trusted firm, such as Interactive Brokers (IBKR). Brokerage commissions for buying US stocks on the platform as US$0.005 per share, with a minimum cost of US$1.
Ultimately, your retirement security isn’t just about how much you save, but will also be about how you manage and grow your savings. Whether through EPF or investments in dividend-paying stocks, the key is knowledge, consistency, and long-term planning. By striking the right balance, Malaysians can work towards a financially comfortable and worry-free retirement.
Read Also: Malaysian Investors’ Guide To Opening An Account With Interactive Brokers (IBKR)
Follow Us On Telegram & Instagram!
Join our Malaysia Telegram channel (@dollarsandsensemy) and follow our Malaysia Instagram Page (@dnsmalaysia) as we bring you the latest finance content in Malaysia!
