K. Sasitharan.
LL.B(Hons)(Lond), ChFC, CLU, CFP
Senior Client Director
ReMark Malaysia Pte. Ltd
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Is retirement planning all about
◦ Finance & Wealth Management
◦ Health Insurance & Annuity
◦ Estate Planning
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You agree it is more than that!!!
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Actual survey findings on Malaysian’s attitude
towards Retirement
Pre & Post retirees attitudinal views
What is “IN & OUT” of our control?
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– The Future of Retirement Project
(www.hsbc.com/retirement)
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- The Retirement Scope Project
(www.retirement-scope.axa.com)
Thanks to HSBC & AXA for their effort
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WHAT IS RETIREMENT?
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Malaysians are typical of Asians in seeing retirement
as a time of rest and relaxation. Yet when asked what
they want to spend their time doing in retirement,
very few mention slowing down, and many talk of
travelling.
In general Malaysian are more likely than other Asians
to associate retirement with positive feelings such as
freedom and happiness, and less likely to associate it
with negative feelings.
As with people elsewhere, Malaysians say family,
friends and keeping fit are important for a happy old
age.
The Future Of Retirement
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HOW WILL WE PAY FOR OUR RETIREMENT?
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Malaysians tend to think that they should bear the costs
of their own retirement, just as many other people in
Asia do.
However, they are more likely than the Asian or global
average to believe that they will rely on their children
for care in retirement?
Compared with other Asian people, Malaysians are more
inclined to think that government should pay for
retirement by means of compulsory private savings, and
less likely to think that the retirement age should be
raised.
The Future Of Retirement
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EXPECTATIONS:
STATE PROVISION ‘CONFIDENCE GAP’
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The proportions are lower in Malaysia, where the survey
shows 21 per cent of working people and 23 per cent of
retirees believe the State should support them in later life.
There is also a marked difference between the working and
retired population’s confidence in governments living up to
this obligation.
Only 10 per cent of the Malaysian working population feel
government will bear this burden, while 20 per cent of
retirees believe the State will bear the financial costs.
The Future Of Retirement
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HOW TO PROVIDE FOR THE AGEING
POPULATION?
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3% of the working population and 32% of retirees seeing
enforced additional savings as their favoured solution –
the majority option.
When considering other options:
 24-27% would increase the retirement age,
 11% across the generations would increase taxes ,
 only 8-10% would opt for reduced state pensions.
The Future Of Retirement
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WHEN SHOULD WE RETIRE?
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Malaysian people believe that both men and women should
retire at a relatively young age.
They are slightly less inclined than people elsewhere to
think that retirement should come at a fixed age.
Asked what might motivate them to work beyond the
traditional retirement age, many more Malaysians than the
regional or global average speak of having something
meaningful or valuable to do.
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The Future Of Retirement
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Retirees stopped working early, on average at age 53
but would have willingly worked until 55.
Income could be the main motivating factor for retirees
wanting to retire later as those with higher income
have lower ideal retirement age than average.
Working people expect to work later than their elder,
on average until 56 but dream retiring earlier at 54
Female dreams to retiring earlier & actually retire
earlier than males.
The ideal & expected retirement age typically increases
with age
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Nearly 2/3 of retirees retired prior to the legal age.
Among these, a majority of retirement imposed by
employer, especially in the South part of Peninsular
Malaysia
Females retired less often than males prior to legal age
and were in particular less affected by imposed early
retirement
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Currently 1/3 of retired people hold a paid job after
retirement
Half of those from South part of Peninsular Malaysia
The situation will most likely change as more than half
of working people plan to hold a paid job during
retirement
Grandparenthood is
sometimes can be a full time
career without any financial
rewards!!!
Sasi …
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Majority of working & retired people approve of raising
the minimum retirement age, at most up to age of 59
Among retired people, there is a large gap between
unskilled workers , who would approve this measure
and owners/top managers & other managers more
reluctant
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HOW DO OLDER WORKERS COMPARE WITH
YOUNGER ONES?
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Malaysian employers tend to rate older workers less
favourably than younger ones.
These employers are also less likely than those elsewhere
to offer older workers appropriate opportunities.
These employers are a little inclined to see the loss of older
workers as a positive than a negative
The Future Of Retirement
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DO EMPLOYERS AND EMPLOYEES THINK
ALIKE?
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In Malaysia 64% of private employers say employees
should be able to work for as long as they are capable of
doing the job and in tune with this, because 76% of
ordinary Malaysian people think the same.
Almost everywhere in the world, the largest proportions of
individuals and employers favour enforced private savings
over other means by which governments can support
ageing populations. But in Malaysia, individuals are very
likely to support the enforced private savings, whereas the
employers support increase in the retirement age.
The Future Of Retirement
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SO HOW ARE MALAYSIAN PEOPLE
PLANNING, PREPARING AND INVESTING
FOR THEIR RETIREMENT?
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In Malaysia, each of the four pillars of support for later
life (government, employer, family and self) is regarded
as contributing to retirement income
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Overall, children/family is seen as the most important
contributor to retirement income ,
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self is ranked as second most important,
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government and employer share equal ranking as
least important
In Malaysia it is interesting that children/family is seen as key by both
high income and low income households, but with the latter seeing
government support as the second most important option
The Future Of Retirement
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*
The Future Of Retirement
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Retirement Planning
- The Practical Approach
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maintain pre-retirement standard of living
be financially self-sufficient
improving lifestyle
managing wealth
passing on wealth
medical expenses
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What are your retirement needs?
What are the available sources of retirement
income you have Planned so far…
To Identify other retirement resources
available if any...
Find Solutions that are achievable for your
retirement needs.
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RETIREMENT PLANNING
Sources of retirement income
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EPF contribution + rate of return until retirement
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Savings
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Investment e.g. unit trust, real estate,… etc
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Life Insurance/Annuity
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RETIREMENT PLANNING
Planning Assumptions
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Life style
Standard of Living (Income & Expenses)
Monthly savings capabilities
Accumulated financial assets that can be
liquidated (Assets & Liabilities)
Investment preference – risk profile
Insurance plans details – Insurance Needs
Analysis
Estate planning consideration – Wills & Trust
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RETIREMENT PLANNING
...is more than a numbers game, it’s is about your vision, lifestyle,
financial attitude & many other emotional factors.
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What is within your control?
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What is outside your control?
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Interest rate, politics, government policies, what’s your neighbour or
friends planning, etc
What is your life style?
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Your earning capabilities, attitude towards financial planning &
discipline in finances (spending vs. savings)
Willing to change, modify or status quo
Idealistic or Pragmatic?
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Your choice…
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THANK YOU
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