Retirement at 57?

Mass affluent Malaysians need an average retirement savings of RM3.9 million to retire comfortably, based on recent findings from the HSBC quality of life report.

The survey is based on mass affluent Malaysians — those with investable assets of between US$100,000 to US$2 million (RM400,000 to RM9 million) — in a comparison of nine markets including Singapore, China, Hong Kong, India, the United Arab Emirates (UAE), the UK, the US and Mexico. About 38 per cent of those surveyed were Boomers (age 55-59), while 32 per cent were Gen X (age 40-54), followed by Millennials (age 25-39) at 30 per cent.

About 57% of mass affluent Malaysians surveyed said that they are concerned about retirement, with the top concern being decline in physical health, followed by higher healthcare costs and inflation eating into the value of their retirement savings.

The country’s aspired retirement age was also the lowest among the nine markets surveyed, with the UK having the highest aspired retirement age of 62 years, four years shy of the UK state pension retirement age of 66 years.

Malaysia's mass affluent individuals surveyed were also divided on plans to work after retirement, with 44% saying they will work after retirement, another 44% saying they will not, and the remaining 12% are undecided at this point.

The respondents said that they would need an average retirement savings of around RM3.9 million, which was lower than Hong Kong (RM5.2 million) and Singapore (RM4.4 million), but higher than the UK (RM3.6 million) and the UAE (RM3.3 million). In addition, millennial respondents (age 25-39 years) in Malaysia said they need an average of RM4.86 million to retire comfortably. Meanwhile, Gen X respondents (age 40-54 years) said they need RM4.53 million, and Boomer respondents (age 55-69 years) said they need RM2.57 million.

Other key findings from the report include that out of 100, respondents in Malaysia scored 77 on the overall quality of life index which was higher than the overall score across nine markets of 75, but lower compared to UAE and India with both at 80.

The survey also found that the financially fit are 4.3 times as likely to score above average on the mental wellness scale, while those scoring above average on mental wellness are 1.9 times as likely to be financially fit than those scoring low on mental wellness.

So, are you ready to retire? If you are, think twice – either you engage in a new area of interest, learn a new language or musical instrument or extend your present job for a further 5 years at least. If not, you may be a good candidate for dementia!

References:

HSBC survey shows Malaysia’s mass affluent aim to stop working by age 57, need RM3.9 mil for comfortable retirement, Anis Hazim, theedgemalaysia.com, 7 November 2023

Survey: More than half of 200 “mass affluent” Malaysians are concerned about retirement, Nursyazwani Jamil, NST, 6 November 2023