Plan Retirement

The Star 14 March 08

KUALA LUMPUR: More than half of Malaysian workers have not prepared for retirement while those who have, only started planning after age 40, according to a survey.

The average age working Malaysians began preparing for retirement was 41, while retirees said they did so at 47.

“That’s way too late. It doesn’t give them enough time to build their retirement fund,” Axa Affin Life Insurance Bhd branding and communications head Cheah Leng Sooi said in announcing the findings of the AXA Retirement Scope 2008.

In the survey carried out by research house Synovate, 313 working people aged 25 and above and 319 retirees aged below 75 in urban areas were interviewed over the telephone.

The survey, part of a global study conducted in 26 countries and involving 18,000 respondents, was undertaken for the first time in Malaysia, from July 23 to Aug 27 last year.

Among those who had planned for retirement, most began after they married, had children, or fell into financial difficulties or had health problems, Cheah said.

Their sources of retirement income included life insurance, Employees Provident Fund and personal savings.

The retired saved an average of RM478 a month, and the working RM704, figures that were considered low compared with other countries.

“Malaysian retirees feel that their retirement income is insufficient to cover household expenses. Their average income is RM1,243 but the amount they need is RM1,568 – a deficit of RM325,” she said.

In comparison, Singapore’s average retirement income is RM3,690, and the amount needed RM3,465; while Thailand’s average income is RM1,276, and the amount needed RM903, according to the survey.

The disparity between high and low income earners in Malaysia is wide, the high-income retirees having four times more than those with low income, the survey found.

Despite insufficient income, three-quarters of the retirees said their quality of life had improved if not remaining the same, while 83% of the working group expect their quality of life to improve or remain the same.