Work for love, or work for money. Why not have both?

“Don’t simply retire from something; have something to retire to.” So said Harry Emerson, an American clergyman and he may have struck a chord close to the heart of many retirees – that retirement is not the end, but a beginning of something new. How are Malaysians transitioning into this third phase of life? Not very comfortably, it seems.

Talk is rife lately that the retirement age for Malaysians may be pushed to 60. In the last decade, the age limit has been altered twice – from 55 to 56 in 2001 and to 58 in 2008. With this move there could potentially be a million more workers to boost the nation’s workforce within 5 years.¹

But does the “silver” generation really need to extend their working life? Let’s assess the situation. Retirement age for government employees is pegged at 58 years while the private sector, in general, hands you the “golden watch” at age 55. Given the current increased life expectancy for men at 74 years and women at 79 years, this would mean that Malaysians will have to spend 20 or more years with no work and possibly no income.¹

Can you live on RM552 a month?

According to EPF statistics, the average contributor with savings of RM132,539.78 at age 55 will have a mere RM552 per month to live on for the 20 years after retirement. Without proper retirement planning or other means of income such as children or relatives to provide for them, many retirees will have no choice but to extend their working years. Working for longer offers the dual benefit of adding to their nest egg and delaying the consumption of their hard earned savings. By just working for an additional 5 years, on average, an EPF member can boost his savings by RM40,000 and provide him with over RM700 per month to live on. Still hardly enough to get by, but a little better than otherwise.¹

Work because you want to, not need to.

Working beyond retirement age should be a matter of choice rather than desperation. With proper retirement planning, you will have the flexibility to choose to throw in the towel or continue to punch in. Now, wouldn’t it be wonderful not to have to work for money?

.

Many of those with financial independence in their later years may still choose to work. One of the main reasons for doing so is the desire to stay mentally active. Work provides stimulation and challenge for a retiree’s day. Work also provides a sense of identity to many people. Removing them from their work may create a huge void in their lives. But even then, should they choose to extend their work life, retirees need not necessarily work in the same pre-retirement position or take on the same workload. Some choose to work part-time so that they can enjoy other pursuits in their leisure hours. Some start their own businesses. Some give seminars and talks.

Another reason why retirees go back to work is because they feel a sense of duty to pass on their expertise and knowledge to their younger colleagues. In a survey by Universiti Putra Malaysia, 96.3% of respondents acknowledged that older people have amassed considerable expertise and skills.¹ Being able to transfer this wealth of expertise, whether as a consultant, mentor or trainer, could prove very satisfying to retirees.

Though not as common, retirement may be a time to finally pursue a lifelong interest. The demands of life and need for career security may have hindered them from certain career choices. Now, without the necessity to make a living, retirees may explore a totally new line of work or even devote their time to charitable causes.

By 2035, Malaysia is likely to reach an ageing nation status with the number of people above the age of 60 reaching 15% of the population.² By 2035, you could be one of them, on the threshold of retirement. Whether you choose to work beyond retirement age or not, the fact is retirement planning will help you develop the confidence you need to make informed decisions for your future. Take action today to secure your future. Only then, should you work well into your old age, it will be for the joy and love of it.

A fulfilling retirement begins with one small step today. Talk to our Relationship Managers on HSBC Advance to find out about HSBC’s new retirement plan.

Call 1 300 88 0181, visit your nearest HSBC branch for more information or visit www.hsbcadvance.com.my to register online.

Facts that figure

• Retirement ages around the world are usually at 60 or more.³
• In 2000, the number of elderly people was 1.45 million or 6.2% of the total Malaysian population. In 2009, the number increased to 2.03 million or 7.1% of the total population.²
• In 2008, the total number of employed persons aged 50 to 54 is 872,700 while those between 55 and 59 amount to 476,800, out of a total workforce of 10,659,600 in the country.¹

September 2012