Retirement Age in Malaysia: Pushing to 65?

Retirement Age in Malaysia: Pushing to 65? Keeping best people longer or suffering from non-performers longer?

Pushing retirement to 65?

Recently, there was this article about pushing retirement age for Malaysians to 65. Source: nst.com.my I then wrote an article about the misconception of EPF withdrawal. Is it 55 or 60 or 65 if this retirement age is pushed to 65? Article here: When can you withdraw your EPF in full, 55, 60 or 65? Retirement age is a sensitive topic really.

Some wanted it earlier… while for some, their companies refuse to let them go…yet.

Many friends have chosen to retire way before 55. Two very close and good female friends come to mind. One is a super successful professional who’s a single and another has a very capable husband and thus she relinquished her senior role and stopped working. Some however are still working and they are past 60! However, their companies wanted them and kept offering them contract extensions…

Some needed to continue working

Some however are working because they needed the money for their life and maybe for their family or even due to some valid circumstances. So, the view itself and the needs of the people are very diverse. Many may not have accumulated enough in their EPF savings yet. Life expectancy is much longer than previously. So, what is your thought if indeed the government uses legislation to push up the official retirement age? Say to 65?

When people could work longer, maybe they could also stretch the home repayment longer?

The longer we could stretch the loan, the lower the repayment and thus the more affordable it could be for the people to own a property they could own versus losing everything when they rent, rent and rent for 35 years when they were still working. How sad it would be if we pay RM1,500 for rental every month for 35 years and at the end of 35 years when our income has stopped, our landlord told us ‘sorry but you will still need to keep paying me rental….’

Let private sector sort it out by itself

In the private sector, there’s enough check and balance. A non-performer will find it hard to continue non-performing and the company allowing this to happen. In other words, it’s never the age which will determine whether this person would be able to continue or not. A top performer at 60 years old would definitely be persuaded to continue their role and perhaps offered an employment contract. Two of my friends were offered this and both are still happily working today. Both are over 60 years old.

Keeping non-performer is a no-no and not productive at all for everyone

However, if a non-performing employee reaches 60, the company would be very happy to let them go. However, increasing this officially using legislation to 65 would make it very tough on the company. Do we expect the company to keep paying this employee (usually very high salary since it’s their peak) simply because the law says so? I would think the private sector will do their best to attract best people to join them versus keeping people just for the sake of age… The better performance of the company will mean they are more competitive and this is good for the nation as well.

My personal thoughts?

Based on life expectancy, I do think current retirement age of 60 seems sufficient. However, whether it goes up all the way to 65 should be decided by the companies hiring these people. Let’s be logical here. If someone is handling an important project which is halfway through (whether in the government or the private sector), we will definitely have to offer them an extension; a contract to continue their work.

Would anyone want any disruptions simply because that person has reached 60? Or perhaps when they reach 59, we do not allow them to do something important? Haha. You have the answer and my personal thought is that 60 should be the maximum for now. Then again, I am just someone close to 50 and not some famous economist. Will listen to all the points from all sides to see if I also needed to change my personal view of this matter.

This was what the government is doing today: Article in Bernama.com.my “Government is studying a proposal to increase the retirement age to 65.’

Please continue working if you can continue to contribute to the nation. Just take more holidays every year, that’s all. Do not forget to already own a property in full whether you retire at 55, 60 or 65… Then, no further need to pay rental every month.

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