PETALING JAYA: Malaysians have no choice but to save more or be economically productive in their later years to ensure they have enough money for old age, financial planners said.
Lee Khee Chuan, a licensed financial planner with 26 years of experience, said to prepare for retirement one had to save more or to work longer hours.
“Another way is to keep working and be economically productive so as to reduce the years in retirement,” he told FMT.
He was responding to the shocking revelation by Employees Provident Fund (EPF) chief strategy officer Nurhisham Hussein that only 3% of EPF contributors could afford retirement.
Nurhisham said by the end of this year, 54% of EPF members aged 54 would have less than RM50,000 in their savings account and that a majority of those who withdrew their entire EPF savings upon reaching age 55 would use it up within two to three years.
Lee said: “Malaysians need to change their mindset and attitude when it comes to retirement planning. We have been conditioned to think of retiring at the age of 55 for too long.
“The new attitude to retirement should be to keep yourself physically healthy, active and financially productive for as long as possible,” he said.
He advised Malaysians to start thinking of working part-time or doing business to generate additional income to build up their “retirement eggs nest”.
“There are many opportunities for flexible time jobs on the internet. One can provide freelance services such as translation services or copywriting services,” he said.
Another financial planner, Kam Geik Guan, said if the retirement age was not extended, then the responsibility fell on people to find alternative ways to supplement their income post retirement.
“In this economy, there are bound to be avenues to use your qualifications, skills and experience to market yourself. Even at 60 years old, given good health, I believe a member is in a position to contribute to the economy,” he said.
He hoped the government would increase the retirement age from 60 to 63 or 65 in light of the news that most lacked retirement funds.
Kam said this proposal, however, might be unpopular with some who would not want to work beyond 60.
“Also, some younger people may not like it as they may be eager to take over certain high positions in management and it will not be available to them until the seniors retire,” he said.
He said retirement planning was highly personal so each one had to take personal responsibility to start planning and taking proactive measures to save and invest.
“Pay yourself first by saving and investing, before you start spending. Have an emergency buffer of at least three to six months in the event of a crisis,” he said.
Meanwhile, Malaysian Trades Union Congress’ Penang division secretary K Veeriah called on the government to seriously consider establishing an old age social protection scheme.
He proposed that a nominal percentage from taxes collected be set aside in such a pension fund or, alternatively, be channelled to the EPF which could devise some equitable distribution system to serve retired workers.
He said until such proactive measures were put in place, the country would witness an ageing population without old age financial security.