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Malaysians should retire at 60. Do you agree?

retirement

Malaysians should retire at 60. Do you agree?

Life Expectancy is now very different from the 80s

Malaysians used to retire at 55. These days, if we retire at 55, it’s considered early retirement. Based on today’s life expectancy of roughly 77 years old, 55 is indeed too far away. 77 minus 55 is 22 years! Erm… how many were able to work for 30 years and saved enough money to last 22 years? Now, the retirement age is 60. It means one has to have enough funds to last 17 years. 77 minus 60 = 17 years.

How much do we really need?

We assume we need just RM2,000 per month for a super simple lifestyle. That’s RM2,000 x 12 = RM24,000 per year or RM24,000 x 17 years = RM408,000. This is assuming everything stays exactly the same and there are no unforeseen circumstances. It assumes that the lifestyle will not involve any vacations and certainly not overseas holidays as well. This is why people worry as soon as their income stops.

This is also why there’s a suggestion to increase the retirement age from 60 to a higher number. Probably 65? Here’s a recent article which a debate has been reignited.

Article in thestar.com.my Cuepacs president Datuk Adnan Mat said they oppose any proposal to increase the retirement age from 60. He said, “This provides better job opportunities for aspiring candidates alongside better career progression among existing employees.”

He also shared that new talents could also bring a fresh perspective which could steer the nation forward. He said, “The introduction of these talents could also be a measure towards creating a new image for civil servants and a new landscape in public organisation.”

Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said, “Now is not the right time for Malaysia to implement a blanket increase in the statutory retirement age, especially since the unemployment rate was at 4.2% at the end of 2021 and 11% for youths aged between 15 and 24 amid Covid-19 and economic uncertainties.” Article in thestar.com.my

Any decision will have to be dependent on the retirement funds

A close friend just typed this in whatsapp to me this evening. “Who can not afford to retire are those who love their job. Maybe is you and my husband 😂” Actually, what she wanted to say is that retirement does not just depend on how much funds one has but depends on how much one needs to spent from their funds. Someone spending lesser can afford to retire even with the same amount of funds as someone who spends much more.

If it’s for policy, I think we need to look into whether these older folks actually have enough to spend on versus deciding just based on age. It’s a social issue if it’s proven statistically that this growing group of elderly folks may not enough funds to retire at 60. I seriously do think that if one could still contribute and the company thinks the same, they will definitely be offering a contract to the employee.

Else, it’s better for the company to offer the role to a younger employee who may be paid lower versus the senior due to the increments. Let’s just focus on higher productivity and not just seniority. We are competing against the world, not among the older and the younger Malaysians. Thanks.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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