To retire at 65?

SO, it’s time to retire and do what you want to do, including reading and gardening, which you miss during your hectic long donkey years working?

For some government servants or private sector employees, once they reach 56, they are looking forward to retirement and call it a day.

However, others are wondering what they are going to do after retirement? They envisage that life will no longer be the same, in fact it’s going to be boring. No wonder, some are simply restless after retirement.

But mind you, retirement is not the end of the journey; it’s actually the beginning of a new journey or a new chapter in life.

Borrowing wise words from author Catherine Pulsifer, “Retirement, a time to do what you want to do, when you want to do it, where you want to do it and how you want to do it.”

For individuals who look forward to retirement, after working all their lives, it’s time to call it a day and focus on family matters and embrace the joy of life.

Malaysia’s retirement age of 60 currently is common worldwide but many countries are planning to increase the figure consonant with a rise in the average lifespan of the population.

According to the Statistics Department, a newborn in 2019 is expected to live an average of 74.5 years with girls expected to live longer than boys. A newborn girl in 2019 is expected to live up to 77.3 years compared 72.2 years for a boy.

With Malaysians’ life expectancy increasing, it would mean more savings are needed to fund one’s life post-retirement.

Malaysia is ageing, and the population over 65 is expected to comprise 15% of the population by 2035.

According to media reports, current Employees Provident Fund (EPF) savings for most Malaysians are barely enough for a decent life after retirement. Based on the current cost of living standards, Malaysians at least need an income of RM1,870 a month.

There are 32 million people in Malaysia, with 69% of the population of ‘working age’ between 15 and 65. Only 48% of the labour force of 14.5 million have active EPF accounts. Imagine, 68% of EPF members aged 54 had less than RM50,000 in EPF savings.

The implication is, the savings will only last 4 1/2 years. And don’t forget, the bottom fifth of EPF members have average savings of only RM6,909!

Based on the data, 60 is the single most common age for retirement among the countries surveyed. A total of 62 countries set 60 as the retirement age, while the second most common age is 65, which is in place in 35 countries. In Asean, seven of the 10 countries in the bloc have a retirement age of 60, including Brunei, Vietnam, Thailand and the Philippines.

According to a 2014 United Nations report, Malaysia is classified under developing economy status, alongside seven other Southeast Asian countries, including Singapore.

Outside of Asia, developed countries with retirement ages at or above 65 in 2018 included Canada, Iceland, New Zealand, the US, and most countries in the EU. Great Britain and Australia set the retirement age at 65 whereas Japan at 62.

Prime Minister Lee Hsien Loong recently said, Singapore will gradually raise its retirement age by three years to 65. The retirement age will rise to 63 in 2022 from the current retirement age of 62 and to 65 by 2030.

Singapore, a city state with a population of some five million which has the longest life expectancy at birth in the world, is growing more dependent on its older residents as birth rates fall and foreign labour is restricted.

Other countries like Indonesia is going to follow the footsteps of other nations from 58 currently.

Singapore will also raise its reemployment age from 67 to 70 by 2030. Under the reemployment law, companies in Singapore are required to offer eligible employees the option of continuing to work until they are 67.

Based on the UN’s data, 20.9% of Singapore’s population will be age 60 and above next year, nearly double the 11% for Malaysia.

On Saturday, the Malaysian Trades Union Congress (MTUC) urged the government to increase the mandatory retirement age to 65 years, as practised in several developed countries, including Singapore but it was immediately shot down by the Prime Minister when he was on an official visit to Cambodia.

To MTUC, the move is to allow low-wage earners and older workers to amass more Employees Provident Fund (EPF) savings.

Human Resources Minister M Kulasegaran said that the government will review the matter before Budget 2020 that is expected to be tabled next month. It seems, it is not going to see the light of the day.

The prime minister said there were nations that did not impose a mandatory retirement age, and employees there could work as long as they liked, but that only meant that they were denying opportunities for the younger generation.

Earlier, Youth and Sports Minister Syed Saddiq Syed Abdul Rahman was against the proposal to retain the current retirement age so as not to block employment opportunities for the younger generation.

To parties against the proposal, the age extension could dampen the morale of existing staff, whose upward progression is hindered.

Remember, there are still a lot of young graduates waiting to be employed, and by extending the age, it will deprive them of opportunities in the employment market. This will definitely upset this dynamic and active group.

“Most seniors in fact don’t want to stop working. We are healthy and living longer, but we don’t want to spend more years in retirement.

“Also many of us want to build up a bigger nest egg for when we eventually retire,” Dr Mahathir was quoted by the media.

Currently, there is about 10.3% of unemployed youths, which is three times more than the national unemployment rate of 3.3%.

What will happen to youths who have just completed their studies at universities if we increase the retirement age to 65?

Fresh graduates in Malaysia are struggling to find jobs where some purposely use SPM certificates when applying for jobs to improve the chance during the interview, otherwise the employers will automatically disqualify them based on the justification that they are over qualified.

Every year, nearly 300,000 students graduate from institutions of higher learning and 55% of them are unemployed after graduating.

“The job deficit has exacerbated Malaysia’s already high youth unemployment rate of 13.2% in 2017, which was three times the national unemployment rate. The unemployment rate for youth — aged between 15 and 24 — has been hitting double digits since 2012. It was 10.6% in 2016,” according to one report.

On the other hand, unemployed youths are at a disadvantage since they may lack the experience to manoeuvre themselves in a tight labour market.

You just need to scrutinise the narratives and comments in the social media to understand the under currents regarding unemployment, high costs of living and other relevant issues related to them.

Not making way for younger people may be a recipe for social unrest or social time bomb, particularly when they find it hard to make a living, buy and own a house or a car.

If the suggestion is to be taken seriously in future, a careful and comprehensive study must be done first, especially in considering the current context of workforce demographic profile, as well as the presence of high youth employment rate.

Raising the retirement age hastily would result in a huge impact on the public sector, which has 1.6 million workers.

Based on the 2019 budget, emoluments account for 31.6% of the total operating expenditure and retirement takes about 10.2% of total operating expenditure. Why not increase the retirement age gradually or confine to certain professions like university lecturers and specialists at hospitals for a start, yes, if at all?