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56% of Malaysians Expect to Retire Before 60

Travel News Asia Latest Travel News Podcasts Videos Friday, 18 February 2011

More than half (56%) of Malaysian consumers retire or expressed their wish to retire before the age of 60, according to a Global Aging Report released by The Nielsen Company.

After Malaysians, consumers in China (51%) and Indonesia (49%) are the second and third most likely groups to retire before they turn 60. On average, 40% of consumers in Asia Pacific retired or plan to retire before the age of 60 compare to the 30% global average.

The early retirement plans of these consumers in Malaysia, relative to their counterparts in other Asia Pacific countries, came as the consumer confidence index in Malaysia hit 3 and 4-year high respectively in Q3 and Q4 of 2010, as tracked by Nielsens Consumer Confidence Index.

While the online consumers surveyed in Malaysia have the highest propensity to retire before 60 years of age, only 21% believed that they are financially ready to retire. This is in line with the Asia Pacific average of 22% but lower than Thais (highest in the region at 68%), Indians (31%) and Chinese (24%). 44% of the respondents in Malaysia were unsure while over one-third said they are currently not financially set for retirement.

We saw consumers optimism towards job prospects going on an upward trend in Q3 and Q4 2010, with 7 in 10(70%) describing their job prospects as excellent or good for the coming year. Similarly, close to two-thirds of the respondents indicated that they were positive about their state of finances. These positive indicators are likely to have been supported by the modest GDP growth in the nation. Ideally, with these encouraging projections, consumers may think that 60 is the right age to retire and enjoy life, said Kow Kuan Hua, Managing Director of The Nielsen Company in Malaysia.

Kow added, However, Malaysians are also skeptical that they can accurately estimate how significantly inflation would shrink their purchasing power over the next 20 to 40 years. They would be worried about not having sufficient money to support their post-retirement lifestyles if the prices of food, utilities and transportation continue to trend up. As a result, some may join a new company or start a new career as an alternative to generate income and improve their financial positions in order to live a more comfortable post- retirement life.

99% of the online consumers surveyed in Malaysia were below aged of 60 with 73% of them in the age group of 21 to 39.

Travel and Clubs Top Two Preferred Post-Retirement Activities

Traveling (77%) and joining a club to keep themselves engaged in activities (55%) came in tops as the most preferred activities for Malaysians post-retirement.

Interestingly, Nielsens report also shows the Malaysian society as one that is caring - 47% of the Malaysian consumers surveyed said they would take on voluntary work after they have retired. This is higher than the Asia Pacific average of 34% but in line with Singaporeans (51%), New Zealanders (50%) and Australians (47%).

Personal Savings a Primary Source of Retirement Income

Slightly more than half (51%) of the consumers surveyed across Asia Pacific said they would rely on personal savings as their primary source of retirement income. The same goes for Malaysians, with a high percentage of 68%. Only 20% of Malaysians said they would have income from company retirement and government-run plans.

The Malaysian population in 2010 stood at 28 million according to the Department of Statistics. Out of that 68.1% were between 15 to 64 years old and 4.7% were aged 65 and above. While the government acknowledged Malaysians aged 55 and above as senior citizens, interestingly, the senior citizens surveyed by Nielsen (aged 60-64) only consider themselves old when they reach the age of 70. Overall, 38% of the respondents defined old as being at the age of 70 and beyond.

On one hand, Malaysians are increasingly more pro-active in financial planning in order to increase their chances of realizing their financial aspirations post-retirement. This should create even more opportunities for the wealth management sector to offer customized products to meet the demand. At the same time, consumers will be looking for ways to save on discretionary spend as they look to grow their nest egg. Again, this is an opportunity for companies to look at ways to satisfy this need, said Kow. On the other hand, with the fertility rate falling to an estimated 2.95 in 2010, and as the population continues to age over the long-term trend (life expectancies at 76.3 for female and 71.8 for male), consumers who are aged 50+ will account for a higher per capita spending in the years to come. Besides travel options, these consumers, in their golden years, are also likely to spend on health, beauty and technology products. Innovation appeal in health and beauty would be something manufacturer, retailers and media should take note of.

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