A recent Manulife report has revealed a concerning reality: only 58% of Malaysians feel financially prepared for retirement. This is despite their aspirations for a fulfilling and dignified retirement, which include financial independence and staying active in various aspects of life.
The report, which surveyed adults across nine Asian countries, highlights a shift in mindset among Malaysians. They prioritize living well and embracing purpose and freedom in their later years, rather than merely focusing on longevity.
However, the data shows a disconnect between aspirations and financial readiness. While 94% of Malaysians envision some form of employment during retirement, only 6% look forward to a fully work-free chapter. Half of those surveyed aspire to a slower-paced work life with improved work-life balance.
When it comes to investment strategies, cash remains the dominant holding for Malaysians, comprising half of all non-property assets. This is followed by savings or annuity insurance and mutual funds. Interestingly, despite recognizing the need to shift cash into higher-yield investments, many are held back by fears of losses and a lack of investment knowledge.
Property, traditionally seen as a cornerstone of retirement planning, is also losing its appeal. Malaysians are now more likely to hold a pension scheme than property, with over half expressing concerns that heavy reliance on real estate could deplete future savings.
The report further notes a growing interest in income-generating products, with 62% of Malaysians open to diversifying into instruments that offer steady payouts and inflation protection.
Additionally, Malaysians heavily rely on professional advice, with 72% working with a financial planner, which is higher than the Asian average and even surpasses Hong Kong’s rate of 62%.
So, while Malaysians aspire to age with purpose and dignity, the data suggests a need for more comprehensive financial planning and a shift towards higher-yield investments to achieve these goals.
What are your thoughts on this? Do you think Malaysians are on the right track with their retirement planning, or is there room for improvement? Feel free to share your insights and experiences in the comments below!