Survey: Majority of urban M40 confident of retiring comfortably, but in reality savings likely to be depleted soon

Malay Mail
Malay Mail

KUALA LUMPUR, Sept 21 — The majority of middle-class urban Malaysians surveyed in a recent poll said they were confident about saving for retirement and unlikely to run out of money against the backdrop of unsustainable post-retirement expected monthly expenses.

The “M40 Malaysians’ Retirement Dreams vs Reality” survey however showed that out of the 272 polled, only 19 or seven per cent had enough savings (RM1 million upwards) to retire worry-free.

This comes as more than half of the overall respondents (51 per cent) stated their monthly estimates for post-retirement expenses were between RM5,000 and RM10,000.

“Forty-five per cent of participants had less than RM100,000 set aside — nowhere near enough for a comfortable retirement. Having less than RM100,000 saved means that participants don’t even meet the Employee Provident Fund’s basic threshold of RM240,000; assuming a person needs RM1,000 monthly to live in retirement.

“At that rate, RM100,000 would be used up in about a year,” the report said.

Despite facing such a shortfall, 48 per cent of participants still said they aimed to rely on future retirement savings for up to 20 years even though they are far beyond saving enough to reach the RM1 million goal.

“The survey also found that 53 per cent of participants wanted to retire before the age of 60 — even as their savings painted a different picture.

“With 69 per cent of survey participants aged between 30 and 49 years old, many of them have about 20 years (or less) left,” it said.

The report also said the findings underscored the urgent need for Malaysians to reassess their retirement strategies and consider alternative avenues for securing their financial future.

The survey, conducted in October 2022, is a collaboration between the financial institution StashAway Malaysia with students from the Asia School of Business’ Action Learning Programme.

Its respondents were mostly made up of middle 40 per cent earners living in the Klang Valley.