Recent survey conducted by University of Malaya’s Social Security Research Centre (SSRC) suggested that Malaysians opt to stay active in the workforce and seek employment beyond the retirement age of 60 years old.
This finding represents the need to create measures to deal with the issue of ageing labour, as the country is about to become an ageing nation. Increasing life expectancy also means individuals should either delay their retirement and work more years, or save more while working and consume less during their retirement years,
SSRC director Professor Datuk Norma Mansor said that as a result of declining fertility and greater life expectancy, Malaysia is currently experiencing a steady growth in the proportion of older people relative to the total population. It is projected that the number of Malaysians aged 60 years and above is projected will reach 3.5 million in 2020 and 6.3 million in 2040, which makes up about 20 percent of the total population. According to a report by the Statistics Department in 2016, she said that a male aged 65 in 2016 could expect to live to age 80 years, while a female is expected to live to age 82 years.
However, Ms Mansor noted that ageing could entail multiple losses, including loss of work and physical functioning. Owing to this reason, there comes a question whether or not the country has prepared in meeting health and financial obligations in later life towards such matters. In a report entitled “Ageing and Retirement: Perceptions and Expectations among Malaysians”, she added that from 518 Malaysians participated in the survey, majority said they would like to live to at least 80 years. Yet, many are actually not self-assured financially about having a comfortable life throughout such long retirement period.
Only slightly half of participants were confident of having a comfortable life, while the rest were not really optimistic about it. According to the survey, professionals were found to be more certain of having a contented post-retirement life, compared to their non-professional peers. Meanwhile, 70 percent would expect to live between six to 20 years more after reaching the age of sixty and will continue working as long as their mental and physical capabilities permit.
One of the most efficient strategies to finance increasing number of retired individuals, many respondents felt that there should not be mandatory retirement. Additionally, to prepare for post-retirement, they plan to boost their savings by reducing current expenses as well as reducing their cost of living in retirement.
“A quarter of those surveyed had intended to move to cheaper location, while others would turn to family members for assistance or consider living in assisted living facility such as a retirement village, while a good number of respondents said they would turn to government for old age support,” Ms Norma said.
She also pointed out that currently, there are only 80 percent of total 13.5 million Malaysian workers who had some form of retirement savings and government pensions although government pensions were not contributory. To prepare for the increasing number of ageing workforce, organisations had to come with strategy about how they would deal with the change, such as to be willing to be continually upgrade their worker’s skills and undergo retraining.