Reality Check on Retirement – Part 1


Retirement is one of the current hottest topics being discussed over and over again. It is an unavoidable truth that we have to retire someday, whether we are ready or not. Thus, allow me to share with you the realities of retirement.

By Yong Chu Eu

When we talk about retirement, the first picture that comes to mind is “a life without a need to work anymore”; however, this is not relevant in today’s life.

Globalisation, technology and the evolvement of human civilisation keep on changing the way and how we used to think or live, and now retire!

We will be bored to death if we choose to do nothing! This is what a majority of us are thinking according to an OCBC Bank’s survey, which states “A growing number of people prefer to continue working with lesser stress, hours and workload when they retire”.

People surveyed relate “doing nothing” at home to an “unhealthy life” which leads to “early death”.  Some even said “we will only fall sick when we are free!”

Another reason more and more people choose to continue working is because they know the importance of having sufficient retirement funds to quit working.

Let’s have a look at HSBC’s 2016 study, which states that a whopping 91% of Malaysians aged 45 and above cannot retire in the next five years due to the reasons below:

Now retirement can be defined in many ways, i.e. “discretionary of time”, “the opportunity to do new things” or “find new meaning in live”. Sound more positive and interesting, right?

Let’s look at what comfortable retirement means, based on EPF’s 2015 report. The three main components of comfortable retirement are financial security, good health and a happy and meaningful life.

However, everyone is different; so rightfully, we should have our own definition of retirement. However, many of us only think of quitting our jobs and live on passive income or retirement fund when we start to plan our retirement.

We should not limit ourselves by thinking that retirement equals financial freedom. There are so many ways to retire – whether it’s pursuing a dream, venturing into a new business, growing a hobby into a business, or even getting involved in charity work. You should not limit yourself on what you can do!

Ageing Population

By 2035, Malaysia will be reaching “Ageing Population” status where more than 15% of our population will be 60 and above.

Firstly, do we have enough facilities ready to ease the life of the old? Secondly, from an individual point of view, are we medically, mentally and financially ready for it?

Based on EPF’s 2015 statistics, we have an average life span of 75. From the day we retire at 55 till the day we pass on, we have about 20 years in between.

A majority of working Malaysians depend on their EPF for their old age spending. EPF reports indicate that the average total EPF savings of an active member at the age of 54 is about RM194,438.

If divided into 20 years of retirement, it comes to about RM840 per month without taking inflation into account. It is very, very tough to survive on RM840 per month today, without the need to work during retirement.

What’s worse is that a majority of EPF members spend all their savings in just 5 years. In case of a shortfall, who can they depend on? Their children? The government?

So as a rule of thumb, we need at least 67% or 2/3 of our pre-retirement income to survive independently; thus, we need to seriously start planning early for our retirement. Do not solely depend on the EPF. The Private Retirement Scheme (PRS) is another you can consider.

Have To Retire Someday

No matter how much we love our job, we have to retire someday due to health issues, physical or mental limitations.

Statistics reveal that a majority of Malaysians maintain a healthy body and mind until the age of 66. Then, there is another 9 years of life that is accompanied by illness. Some may need full or partial living assistance, or consistent medical care and visits. This can be a big burden to family members.

The study below by Aged Care Group is very useful. It reflects the types of medical and home care costs involved; a part that is hardly covered by insurance. Most Malaysian insurance companies cover total permanent disability until the age of 65; however we do not have a long-term health care policy.

In fact, we need to fork out our own money for this spending and this situation can dragged to a very long period of time, some even longer than normal life span.

To me, retirement should be a lively affair without any commitment towards family or friends. I always tell people that I am now at a “semi-retirement” stage, because whatever I am doing now, like teaching, volunteering, doing charity, travelling, parenting and gardening, are activities that I am passionate about. In case you’re wondering, I’m not “fully retired” due to my commitment toward my family.

Nevertheless, even if I am financially independent one day, I will continue doing these activities because these are things I’m most passionate about.

If you’re still unsure about how to retire, fret not! Just keep on searching until you find it.



About the author: Yong Chu Eu is a Licensed Financial Advisor/Educator of Fin Freedom Sdn Bhd (CFP, FAR, CMSRL & HRDF Certified). He can be contacted at


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