Working longer as an alternative? I hope not, if possible.

When I was much younger, the retirement age for the Malaysian workforce was 55. It is currently 60. Malaysians are expected to live longer. We may need to ensure we have enough funds for 20 years after we retire. Even assuming we need just RM2,000 per month to survive, that’s RM24,000 per year or RM480,000 until the day we say bye-bye. How much do Malaysians have in their bank accounts? Here’s one article: 42 percent senior citizens have zero savings  In many countries, the retirement age is easily 65. For example, in the UK. In Singapore, it’s 62 by statutory BUT if employees want to work on, the employers would have to offer them a job till 65. It will be up to 67 years come July 2017. It’s also 65 in Australia as well. In the US, it is 66 years old. Sometimes, we do wonder why should people work longer? Well, perhaps the nation still needs them. Especially true for countries which are becoming an ageing nation. Is Malaysia becoming one? Oh no, 15% over 60 by 2035 
There was this article in TheStar about the possibility for the retirement age for Malaysians to be extended to 65. The Women, Family and Community Development Minister, Datuk Seri Rohani Abdul Karim said, “Though we accept the idea, we need to study it thoroughly.” (Please note that this statement meant that the government is open to the idea)  She also shared that the negative points from this is that the younger ones who were supposed to be promoted would be affected. (If the manager is STILL the manager, then the assistant manager cannot become the manager…. right?)  Rohani also said something which I agree totally. She said that senior citizens over the age of 60 have a different approach to working and want a job with flexible hours. (I think most senior citizens, as long as they are closer to retirement age should have a more flexible job. They should also be focusing on jobs which requires them to help upskill and upgrade the younger generations. This will benefit the nation as a whole) Besides, the decision of whether the retirement age should be raised is also going to rely on the inputs from other agencies such as the Public Service Department (JPA).
My opinion about retirement? Well, I hope I could retire earlier than the current retirement age. That’s why investments must form one part of what I do, beyond just not spending indiscriminately. This is what David Beckham thinks about retirement. I also think it’s never about age as well. It’s all about interest and perhaps physical capability. Everytime I go to Singapore, I would notice that their foodcourts would have cleaners who are senior Singaporean citizens instead of foreigners. My friend once told me that this is because these senior citizens are still healthy and would like to work instead of staying home to watch TV. I beg to differ. I think, working for some senior citizens is a necessity and not to cure boredom. One major reason is also because they (senior citizens) are living longer and yet they do not wish to burden their children who’s also facing high property prices and rising costs of living. Working longer is thus not an alternative due to interest.  It’s just another way to ensure one would have enough savings from continuous earnings for the retired years. Save more,  invest harder.  Hopefully it’s a choice to us in future and not a must.  Happy working because I love my current job too.  
written on 12 April 2017
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  1. One needs only RM 500k to retire. One need not worry as this sum can support a retiree in perpetuity. If one can stay invested with RM 500k at an average of 5% p.a, it gives a person RM 25k a year. Assuming he expends only the interest, his 500k can be his legacy for the next generation. I’m sure many blue chips give dividends of 5% a year?

    1. Nice illustration Fred. I think this is possible for most middle income professionals. In fact, EPF alone should have this number for someone who has worked n contributed for 30 years with a starting pay of 2500.

    2. One needs to factor in inflation. 25k now would be 50k in 12-15 years time.

      1. True Ivan. That’s why it’s always a hedge. As long as are still growing it, it should be okay. Only worried with those who are not growing it n let it stay idle.

      2. Ivan, thanks for pointing it out.
        Yes, we need to factor in inflation. Hopefully as we age we spend less. When we just retire, most of us are still young and healthy to travel and enjoy life, I.e spend more.
        After a few years, we become more settled and spend less. Sure we can reason that medical bills will go up. But stay healthy and find more hobbies that are less expensive. 5% from dividends is also very conservative. There is also capital appreciation, hopefully.

        1. Wow. So cool. We are having a discussion here Fred n Ivan. Enjoy your weekends yea.

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