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Etiqa Insurance and Takaful studied the attitudes and preparations of Malaysians towards retirement in its Etiqa Retirement Survey 2023. The study was a companion survey to Etiqa Singapore’s Retirement Survey 2022 to better understand how Singaporeans and Malaysians compare and contrast in terms of their retirement preparations, plans and hopes.
The Etiqa Retirement Survey 2023 interviewed a total of 804 Malaysians, aged 20 to 60 years from every state in the country. A key finding from the survey was that only 23% of Malaysians think they can retire comfortably given the longer lifespan Malaysians are living now at 73.4 years, the 5th highest lifespan in South East Asia. As per the norm in many countries, Malaysian women are living longer than their male counterparts at 75.6 and 70.8 years respectively. As such, an average Malaysian male could expect to live another decade post-retirement, while an average Malaysian female could expect to live another decade and a half. Thus the necessity to have sufficient savings at retirement is increasingly apparent.
Reinforcing this concern is data from the Employee Provident Fund stating that retiring in Kuala Lumpur today requires RM2,450 a month for basic necessities. Based on this, a person residing in Kuala Lumpur will need a minimum of RM600,000 to retire, while RM900,000 to RM1 million is needed to retire comfortably. [1]
Given that Malaysians need to be millionaires to retire comfortably, sufficient time is needed to grow their wealth. However, the survey also discovered that 46% of Malaysians only start to plan for retirement at the golden age of 55 and above, which is only 5 years before the current retirement age in Malaysia. This stands in contrast to the situation across the causeway where 51% of Singaporeans started their retirement planning in their early adulthood at 34 years of age, while only 12% of Malaysians started their retirement planning in the same age group.
Another area where Malaysians and Singaporeans differ is in their Top post-retirement activity. Malaysians are still considered a conservative society as family comes first when it comes to activities post-retirement while for Singaporeans, travel is top of mind in their golden years.
Post Retirement Planned Activities
On the flip side, both Malaysians and Singaporeans see the greater leisure time post retirement as giving them a chance to pick up a new hobby.
Top Fear Upon Retirement
Similarity between the two countries is also evident in the fears they share upon retirement. Citizens from both countries fear failing health the most and understand that it would consume most of their retirement funds. Hence, depleting funds comes in as the second most feared scenario upon retirement at 23% for both countries. The third fear is unexpected events which includes global inflation, pandemic and global crises.
Commenting on these findings, Kamaludin Ahmad, Group Chief Executive, Etiqa Insurance and Takaful said, “The study reveals a worrying truth about Malaysians. Based on the survey, it is learned that Malaysians are complacent with their retirement fund as most of them do not plan ahead in their early adulthood. Hence, there is a continued need to educate Malaysians on the need for financial planning for their retirement.”
“For example, if an individual thought that saving up to RM600,000 for their retirement fund is enough to cover medical bills, daily needs, emergency funds and miscellaneous items, they may be in for a surprise later to see just how that they have miscalculated. Protection plans that provide critical illness coverage as well as medical and personal accidents coverage to minimize the impact on savings during any future hardships should be a must for everyone,” he added.
While there are differences between Malaysians and Singaporeans with regards to the attitudes towards retirement planning and post retirement activities, the survey does emphasize that we share many of the same concerns thus reflecting our common history and values. As an ASEAN based insurer, Etiqa will seek to unearth (via future surveys) both the differences and commonalities across South East Asia in our effort to better serve the needs of people across the region.
