Bank Negara Malaysia (BNM) revealed today that up to 92 per cent of Malaysians worry over their financial health and needs at old age as well as being unprepared for retirement.
BNM Assistant Governor Jessica Chew Cheng Lian said 33 per cent are ‘very worried’ about their financial health when they get old, while the remaining 59 per cent are ‘a bit worried’.
Speaking at a panel session themed “Your Retirement Aspiration: Making It A Reality” at the International Social Security Conference 2016 here today, she pointed out that 40 per cent of Malaysians say they are ready for retirement while 80 per cent claim they have the strategies to meet expenses at old age.
The most popular strategies include relying on the children or partner, continuing working, and relying on government financial assistance.
Chew stressed that most Malaysians adopt a passive strategy for retirement, with 42 per cent preferring to buy properties, 25 per cent opting to save money in the bank and 18 per cent depending on the Employee Provident Fund (EPF).
She noted that only 24,180 insurance policies with annual premiums of RM280.2 million have been sold since tax incentives were introduced in 2012.
To re-shape the reality among Malaysians, Chew said awareness has been raised through the integration of financial education into formal school curricula for pupils from standard four to six.
“We have also established a financial education network to coordinate and drive financial education initiatives at international level,” she said.
Chew said BNM has also introduced diversified and innovative pension products to help individuals manage the risk of retirement.
She said prospective retirees’ other strategies include improving the incentive structure, such as by encouraging a greater role for employers in providing voluntary occupational pension plans, as well as incentivising income drawdown to avoid premature depletion of savings.
According to Malaysian Healthy Ageing Society Advisor Nathan Vytialingam, men aged between 65 and 74 are considered young-old, those aged between 75 and 84 are middle-old, while those aged above 85 are old-old.