Retirement age will be 65 starting 2029 for Singapore. Do you want Malaysia to increase ours too?

Retirement age will be 65 starting 2029 for Singapore. Do you want Malaysia to increase ours too?

I really do intend to retire from full time employment as soon as my son graduates from university. That’s the same year I reach my statutory retirement age here in Malaysia; 60 years old. What about you? Perhaps you do not have to think so much like me and you could retire earlier? For Singapore, their statutory retirement is currently 64 years and it will be raised to 65 starting from 1st January 2029. As per reports, this is one year earlier than the scheduled 2030 timeline.

Another reason I think I could is also because I don’t drive some expensive car and has been driving a fully paid car for the past 11 years too. Plus, I can eat mixed rice every day. My wife could not though. Haha. Anyway, let’s look at Singapore which has decided to push the retirement age from 64 to 65. Read it here:

Article in themalaysianreserve.com Singapore plans to raise its statutory retirement age from 64 to 65 and its re-employment age from 69 to 70 on Jan 1, 2029, a year ahead of the previously scheduled 2030 timeline, reported Xinhua.

The plan is among six recommendations released on Monday by the Tripartite Workgroup on Senior Employment. The government has fully accepted the recommendations.

Under Singapore’s re-employment framework, employers must offer re-employment to eligible employees who reach the minimum retirement age, until they reach the re-employment age.

Other recommendations include enhancing earned income tax relief for seniors who continue working beyond the statutory retirement and re-employment ages, and raising the minimum and maximum Employment Assistance Payment amounts for eligible workers who are not re-employed. Please read the full article here: Article in themalaysianreserve.com

Retiring later, is it a necessity?

Well, if one has a fully paid property, one could stay for free. In fact that car which has been fully paid for can be driven for free too. Just need to maintain it occasionally. These two, coupled with the fact that If one has sufficient amounts in the EPF, say RM1 million, then just using the dividend portion alone is the following:

RM1 million x 6 percent = RM60,000 or RM5,000 per month.

Yes, this amount is considered comfortable as soon as we take out the need to pay for rental or even a car loan every month. So, the RM5,000 is needed for just food and other lifestyle needs. Occasional holidays are also possible as long as one does not splurge on flights or hotel too.

So, for this person, it’s not a necessity.

However, if one continues to need to pay for rental, needs to pay for a car, likes to own latest gadgets, then RM5,000 per month is really not that much to begin with. In this case, retiring later would probably be a necessity so that one does not spend into the RM1 million savings and instead only use the dividend portion instead. This enables one to still earn and add to the RM1 million accumulated savings too.

Just need to note that majority of Malaysians do not have RM1 million EPF savings to begin with, so perhaps retiring later could be a good decision too. Just stay healthy so that we could continue working too.

As per https://dollarsandsense.sg/much-cpf-savings-every-age-group/, someone who’s 55-60 years old in Singapore would have roughly above S$300,000 but below S$400,000. This is roughly 40 percent of the CPF member. If CPF provides a similar return as EPF, then this S$400,000 would provide the member with a dividend of between S$18,000 – S$24,000 per year. Again, if we assume the person has a fully paid home and does not drive, then I think it’s still okay since food is considered cheap versus salary in Singapore.

When we look at the above, we can see that there is a need for some Singaporeans to continue working too. Thus, I think the statutory retirement age increase is truly a good decision.

As for Malaysia, there’s also the suggestion to increase it from the current 60 years old. We will see what happens in the next few years.

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