Malaysian Insufficient Savings For Retirement

Younger workers need to save more to ensure that they have enough savings for retirement, ideally accumulating 12 to 14 times their last annual salary, Allianz Asset Management AG said.

This is crucial as the Malaysian retirement pension scheme does not provide an adequate retirement income, its Head of International Pensions, Brigitte Miksa said.

“Workers close to retirement age today will have exhausted their assets in the first five years of their retirement.”

“Hence – establishing a planned spending phase with annuitisation as a key element is one way to protect individuals against longevity risk (the risk of outliving your assets),” she told a press conference following a briefing on ‘Retirement Readiness in Malaysia and Reforms Needed’ today.

Citing the Allianz Retirement Income Adequacy indicator, Miksa said the retirement income provided by Malaysia’s pension scheme is one of the least adequate among 49 countries.

She said one of the most effective measures to improve adequacy is extending working lives – as it
reduces the risk of outliving accumulated assets and extending the saving process.


“The Employees Provident Fund – being one of them – but every individual needs to take their own ownership in terms of having a separate private retirement scheme account, or life or health insurance related products. The assets built up until the retirement age of 55 is insufficient as workers are living longer due to rising life expectancy.