I have been thinking about my own retirement planning in Malaysia since my 20s, when I first started working. As they say – it’s never too early to start (nor too late! If you are 40 years old and above, you can benefit a lot from being assisted professionally via a financial planner.)
Tbh I still don’t know how I feel about retirement. Sometimes I think that retirement is an entitlement for productive members of society, while other times I think it’s incredibly wasteful, even discriminative, to suddenly force someone out of a trade, profession or career due to her or his age.
The many ways to do retirement planning in Malaysia
Retirement planning in Malaysia depends on how you want to retire. When you want to retire is secondary – the usual retirement age in Malaysia is 60 years old, and some want to retire earlier, while others don’t want to retire at all.
Thanks to both real-life people I’ve met and online accounts, I’ve realised that most people have one thing in common – personal agency matters more than desire for early or late retirement. What most people really want is to be self-sufficient and not being a ‘burden’ in old age.
Therefore, it’s a good idea for you to know the options out there so you can think ahead for your own retirement planning in Malaysia. Here are 10 ways I can think of. Some of them may overlap.
#1 – The ‘Traditional Asian’
What it is: Multi-generational family living under one roof
What this retiree does: Help with house chores, take care of grandkids
Income needed for this type of retirement: If it all goes well, zero. Your children are expected to financially support you with the help of your own retirement savings.
This type of retirement should be intimately familiar to many of us, even expected. I experienced this too: my late grandfather lived with us and drove me to school before he got too sick to continue.
#2 – The Visitor
What it is: The retiree may have own home (or an RV) but spends a lot of time travelling. They visit families and friends for a few days/weeks/months then move on to the next one, rotating between them. Their children may live across the country or the world.
What this retiree does: Spends time with family and friends.
Income needed for this type of retirement: Varies, according to the method of travelling and living accommodation.
I’ve met a few Visitors before, in my travels. One in particular stuck in memory: this lady who decided to take up an invitation from her friend who has a house in rural France. She lived with her for a couple of weeks. I remember this because I recall the friend casually mentioning that she was surprised when she took up the offer, considering they were not that close to begin with.
#3 – The Retirement Community
What it is: A location especially created and targeted for retired individuals, OR a location that garnered a reputation for being elderly-friendly. For example, easy access to healthcare is a must. Some communities are also faith-based.
What this retiree does: Spends time with other retirees doing leisurely and/or religious activities. Families come to visit.
Income needed for this type of retirement: I heard they are expensive in the US, so many people also consider settling down in other countries where the living cost is cheaper. This is the one from the movie The Notebook (as well as some other movies, can’t recall).
I remember bumping into a lady in Hadyai, Thailand who decided to simply rent out a modest hotel room and retire there. After she helped me with directions, she excitedly showed me where she got her supply of fresh bread. She seems happy.
In Malaysia, I don’t know any formal retirement communities aside from faith-based ones.
#4 – The Subculture Community
What it is: Some subcultures have their own ‘wise sages’ – people who stuck to that subculture since the early days and act as mentors in the community. They are valued for their wisdom.
What this retiree does: From what I know, they kind of hang around and enjoy being consulted in the community.
Income needed for this type of retirement: Depends on the subculture, but they are fairly self-sufficient and tend to live minimally.
When I was in Koh Phangan, I recall this kind gentleman who taught people how to poi.
I met a contact juggler in Langkawi who busk for a living. He was saving money to meet up some community members in KL, if I recall correctly.
I know of a retired art critic who lives in an Orang Asli settlement. He gets regular visits from friends in the industry.
I’m sure there are many other examples, but my personal knowledge is limited.
#5 – The HelpXers and WWOOFers
What it is: People who stay in one location (usually not in urban areas) and open their homes to volunteers and other travellers.
What this retiree does: They tend to have pets, farms and livestock, so daily activities usually revolve around that.
Income needed for this type of retirement: Need to be fairly self-sufficient but if you have a farm this greatly help in reducing cost of living.
I’ve done HelpX a few times and loved it (my writeup on the experience). I do think this is a win-win arrangement all around – volunteers and travellers get to experience the farm life in exchange for food and accommodation, while retirees benefit from the labour.
It doesn’t have to be farm life. There are also hostels and Bed-and-Breakfasts that do this too. I saw some postings specifically asking for people with specialised skills like website designing and photography and stuff.
#6 – The Big Adventure
What it is: People who are like, I’m done working, I WANNA LIVE. Then they book a one-way ticket to a country they’ve never been to.
What this retiree does: Sky diving, swimming with sharks and all kinds of new and exciting experiences.
Income needed for this type of retirement: Depends on the type of adventure, method of transportation and living accommodation.
I LOVE this kind of people. Every time I bump into them, I hear the best stories. It’s obvious that they re-fell in love with life and everything it has to offer, and that zest for life is honestly contagious.
Being attracted to the DINK lifestyle (Dual Income No Kids), this retirement option appeals to me the most. However, I understand that this lifestyle is only fun when one is healthy. When one is not, the money goes to hospital and medical bills instead. If money runs out, I’m also more prone to the worst possible option – being poor and abandoned (#10).
#7 – The Cruise
What it is: People who book themselves on long, long cruises.
What this retiree does: Whatever entertainment the cruise offers.
Income needed for this type of retirement: I have no idea how much they cost, but it can’t be cheap.
Came across this living arrangement in a Reddit thread. Apparently some retirees just get on cruises until they can’t or pass on. Some cruises also target this niche group and have amenities on board for them.
The sea can scare the crap out of me, so I think this is not for me, but I imagine it would be fun for some people. Some cruises are pretty damn big and contain everything from movies to bowling alleys to casinos to live shows. Plus, the food is all-you-can-eat buffet.
#8 – The Ones Who Keep Working as a Hobby
What it is: People who retired, but only by name. They enjoy their work and continue it out of passion, and may or may not be of traditional retirement age – some simply retire early because they have sufficient funds for the rest of their lives.
What this retiree does: Their usual work. They may choose several routes: provide consultancy, collaborate on a project, set up a new business – as long as they get to keep doing what they do. They may or may not get paid for their work/hobby.
Income needed for this type of retirement: People who do what they love as their work tend to enjoy good financial stability, so cash is not generally an issue. But it’s great that they have an option to select projects they can get paid for.
#9 – The Ones Who Keep Working Because They Need To
What it is: People who have to work past retirement age because they can’t afford to retire. They may live alone or with families, but they’re cash-strapped.
What this retiree does: Whatever work that pays their living costs.
Income needed for this type of retirement: It’s not considered retirement. I don’t think anyone would choose this lifestyle.
This subset scares and saddens me. These are the people who suffer from age discrimination and tend to accept lower-paying jobs, usually demanding physical labour or demeaning (by societal standards). You’ve seen them. They’re the people who collect recyclables from garbage bins and sells them. The ones who care for other people’s children and left their own grandkids. The ones who go table to table, asking you to buy their kerepek, despite their aching feet.
Yet they’re still considered the lucky ones.
#10 – The Poor and Abandoned
What it is: Can’t work due to health or other reasons. No or minimal support from society. May or may not have families or relatives.
What this retiree does: Being in pain, all day every day. Very little social and intellectual stimulation.
Once in a while, some poor and abandoned soul is highlighted in the media. We’ve seen the pictures. The luckier ones get into a donation-based, run-down, understaffed old folks home. The unlucky ones live in bare shacks with minimal amenities, getting by with donations. The unluckiest are homeless.
The sense of hopelessness is soul-crunching. My primary emotion is pity, as condescending as that sounds. I want to help, but often my own priorities get in the way and I conveniently forget about their existence, until the media highlights them again.
I take a small comfort over zakat contributions, which is supposed to help them. Still, it’s not enough. I know how expensive healthcare is.
Dear readers, I hope you’ll never end up poor and abandoned. I don’t know most of you, but I wouldn’t wish this on my worst enemy.
Growing up, I simply assumed there was just one type of retirement. You serve your company for decades, then receive pension/retirement savings to retire at 55-60+ years old to make room for younger folks. I think many of us have this impression as well. This is the traditional formula in life, isn’t it? Birth, Play, School, Work, Family, Work, Kids, Work, Retire, Die.
But the world has changed, and it’s best to accept that most people do not have enough money to retire. Most companies do not provide pension nowadays. And even if you get one from being a civil servant, it may not be enough. I hope I’m wrong, but most people will either be #9 – have to keep working because they have to.
In any case, prediction remain prediction until it happens. Personally, I’m going to use the time I have to improve my own odds, because I can’t solely rely on the government to turn things around.
Back to you – I’m very interested to know if you know of any other types of retirement planning in Malaysia, if there’s anything I missed. Which retirement options do you want for yourself, and what do you plan to do to get it?