SHAH ALAM, Jan 31 — Malaysians are urged to contribute to private retirement schemes as a supplementary plan for a more sustainable retirement, rather than relying solely on the Employees Provident Fund (EPF).
Financial advisor and planner Irda Rina Kamarulbahrain said the move is worth considering, seeing that many Malaysians choose or are forced to continue working after retirement for various reasons.
“There needs to be a backup plan because our current retirement scheme is insufficient. If we look at the statistics, many Malaysians do not have enough retirement savings, even though they have a long life ahead.
“Everyone actually needs additional funds, whether through regulated safe investments, insurance, or takaful, which also offer retirement schemes. This is a good plan to help build self-discipline while still healthy,” she told Media Selangor.
Irda Rida said that lifestyle and the increasing living costs are among the main factors Malaysians have to work beyond the age of 60.
She added that Malaysia’s shift toward an aging nation by 2030 will increase risks for this group, especially after the government relaxed withdrawals from the Employees Provident Fund (EPF) during the Covid-19 pandemic.
"By 2030, about 15 per cent of Malaysians will be 60 years old and above. The concern is that many of them will still have debts, especially those who only started borrowing at age 40 or older.
“The upcoming senior citizens are expected to be those still in debt while at the same time having to cover a relatively high cost of living."
Irda Rina said that while the government's retirement schemes, including the EPF and pension plan, are commendable, their effectiveness depends on individuals’ financial literacy.
However, she suggested a reform to the nation's retirement system, including by increasing employees' monthly contribution or by implementing financial literacy campaigns, particularly targeted at the youths.
“If we don’t take action, such as encouraging the public to save, then when we become an aging nation, the government will bear the medical costs of senior citizens.
“There is also a loss to the economy when many jobs employ older workers, as it reduces employment opportunities for young people. This issue requires cooperation from all parties,” she said.
Previously, local media reported that the country’s retirement landscape is changing, with the majority of Malaysians choosing or being forced to work beyond the official retirement age, according to the latest Sun Life Regional Retirement Survey.
The study found that 64 percent of respondents in Malaysia expect to continue working or are already working past retirement age.
