HSBC survey: Even Malaysia’s ‘mass affluent’ anxious about retirement

Malay Mail
Malay Mail

KUALA LUMPUR, Nov 7 — Over half of Malaysian respondents classed as “mass affluent” were concerned about their retirement prospects despite their level of accumulated wealth, according to a new survey.

In the HSBC Quality of Life report released yesterday, the “mass affluent” were defined as individuals with between US$100,000 and US$2 million (RM460,000 and RM9.3 million) of investable wealth. Generally, the group differs from traditional upper-middle income earners by holding more liquid assets.

The same “mass affluent” respondents in the survey by London-based bank HSBC also said they would need an average retirement savings of around RM3.9 million to retire comfortably.

Exploring the concept of a good quality of life across different generations of mass affluent individuals in nine markets, the report also said that the average retirement savings needed by Malaysia’s respondents were lower compared to others in the region such in Hong Kong (RM5.2 million) and Singapore (RM4.4 million).

However, it was higher than those reported in the United Kingdom (RM3.6 million) and the United Arab Emirates (RM3.3 million).

The report also said Malaysia’s mass affluent aspire to retire at the age of 57 — three years short of the mandatory retirement age of 60. This age was the youngest among the nine markets surveyed.

When compared by generational groups, Malaysian respondents categorised as “Millennials” and “Gen X” said they aspire to retire early at age 53 and age 56, respectively, compared to 61 among the “Boomers”.

As for potential concerns about retirement, respondents cited a decline in physical health the most, followed by higher healthcare costs and inflation eating into the value of their retirement savings.

“The Quality of Life survey paints an interesting representation of the holistic needs of the mass affluent in Malaysia where being financially fit is important to them, but so is their physical and mental well-being.

“They aspire to retire early but are also cognisant that they would need to build significant financial savings to retire comfortably,” HSBC Malaysia’s country head of wealth and personal banking, Linda Yip, said in an accompanying press release.

In the same report, respondents were also split on plans to work after retirement, with 44 per cent saying they would and an equal proportion saying they would, offset by 12 per cent who were undecided.

At present, they cited personal savings, followed by retirement savings schemes and individual stock fund and bond investments as the top sources of income they would expect to rely on once they retire.

The Quality of Life Report survey was conducted with 200 Malaysians out of 1,779 respondents surveyed across nine markets including the United States, Mexico, the UK, UAE, India, China, Hong Kong, and Singapore.

For Malaysia, 38 per cent of those surveyed were designated “Boomers” (aged 55 to 69), while 32 per cent were “Gen X” (aged 40 to 54), followed by “Millennials” (aged 25 to 39) at 30 per cent.