The Age of Financial Uncertainty

What most older working Malaysians look forward to besides retirement is withdrawing their EPF savings. Quite understandable. After all, retirement is sweeter when we have money to spend on what we have been planning for.

We have worked long years and have diligently contributed to Employees Provident Fund (EPF). Finally, it is time to enjoy the fruits of our hard labour!

It came as no surprise, therefore, when World Bank Malaysia recommended recently in their report that the EPF withdrawal age be raised to at least 60, there was swift public outcry to this proposal.

The main thrust of the World Bank Malaysia Report was to argue the case for expanding social pensions and providing coverage for a rapidly ageing population. By 2030 an estimated 15% of our population will be 60 and above. There was an urgent need to ensure no one falls below the poverty line.

Social pension refers to financial support given to the elderly. Eligibility could be means-based or age-based, with contribution coming from government revenues. A good example is the current Bantuan Warga Emas (Senior Citizens Assistance) where eligible elderly receive RM600 a month.

Is this sum adequate? Can the government afford to expand the recipient base? Where would the funds come from? What are the trade-offs?

However, the immediate reaction from the public was not to address the above questions.

These would best be left to the economists and policy-makers, but rather it was aimed at the proposals to raise the EPF withdrawal age from the current 55 for partial withdrawal to 60 for full or monthly/flexible withdrawal. It was also proposed that the retirement age be raised from the present 60.

These proposals did not go down well with EPF contributors.

The World Bank Malaysia Report argued the case for expanding social pension and provide coverage for a rapidly ageing population. The report can be downloaded at 
https://www.worldbank.org/en/country/malaysia/publication/should-malaysia-expand-its-social-pension-global-evidence-design-issues-and-options

Cool heads needed 

The outcry was not unexpected. Any proposals to delay access to their savings would meet with opposition. We need to have cool heads to reflect on this issue.

First of all, the average life expectancy has gone up to 76. Retirees in their 60s and even early 70s are generally fitter and able to continue working if they choose to. Countries like India and China have raised their retirement age to 60. For Denmark, Australia and the Netherlands, it’s 67. The rest of the world is likely to follow suit.

How would the proposal to expand social pension coverage and adequacy benefit the elderly?

It would certainly help towards poverty reduction for the recipients and their households. It would also reduce financial inequality in the population. Aid recipients will have an option to stop working and help out with the family, for example, in minding the grandchildren.

Relief from the necessity to work will translate into better physical and cognitive health for the recipients – less stress and depression, and improved overall wellbeing.

If the retirement age is raised, workers can save more with EPF, and with compound interest, they can amass a decent nest egg for their old age. This would lighten the financial responsibility for adult children to support their parents. The latter would remain financially independent for a longer period.

It is simple math to estimate how much we need upon retirement based on our current monthly expenses. Multiply that by the number of years we expect to live, and we can get a rough figure. Check that against what we have in our EPF and we should be able to gauge our financial position and decide whether to go back to work. Hence the worldwide trend for countries to raise the retirement age. If we decide to quit the work force at 60 (many even earlier), guess who will have to support them in their old age? Their adult children and the government.

Let’s not forget informal workers such as family helpers, street vendors and gig workers who do not contribute to any institutional savings fund, and therefore have no financial support in their old age.

Even with EPF savings, only around 36% of active contributors meet the existing Basic Savings level of RM240,000 at age 55. Is that sufficient to live on for the next 15 to 20 years?

Based on EPF statistics, 6.3 million members under the age of 55, or 48 per cent, have less than RM10,000 in their accounts. That works out to a retirement income of less than RM42 per month for a period of 20 years! Reflect on that, and we can understand why there is urgent need to expand social pension coverage in Malaysia, as recommended in the World Bank Malaysia report.

Financial literacy

Prudent money management is vital when it comes to ensuring our savings can support us through the years of retirement. Whether we are in the B40 or M40 group, money is never enough. We could always do with more. But where do we draw the line?

Having access to EPF savings or receiving social pension does not necessarily mean we have sufficient funds to see us through our retirement.

For one, we can’t afford to help our grown children with huge sums of money. Remember, retirement funds are for our retirement, and not for expensive weddings, luxury holidays, and children’s tertiary education. While it’s fine to donate small amounts to charity, it’s not okay to be paying for our adult children’s housing mortgage, post-graduate studies, car loans, and credit card debts. They are old enough to fund their own plans and pursuits, and deal with any financial commitments themselves.

Some adult children become so used to parental support that they expect their parents to step in whenever they need an injection of funds. The financial aid has to stop once the children start earning.

With longer life expectancy comes the need for retirees to look after their elderly parents who are in their 90s. That could mean paying for their healthcare and medical expenses.

If there is one single item that will swallow up all our hard-earned savings at one go, it has got to be medical expenses. Long-term care can drain our retirement funds. We are fortunate to have access to free or minimal charges for the elderly at public hospitals and clinics. We should appreciate that.

The smartest tip for retirees to stretch their savings is to invest in an active and healthy lifestyle.

Last week I met with some families with elderly members living in government low-cost apartments (PPR). I wanted to find out how they were managing their household expenses.

For those living alone with minimal savings, receiving RM600 a month is hardly enough. They have been told the current rental of RM124 for their apartment would soon be raised to RM250. They worry about whether they would be ­evicted if they are unable to keep up with rental payment. They had no knowledge of the proposals in the World Bank Malaysia report. For them, their main concern was bread-and-butter issues and receiving government subsidies, which they say do not adequately cover their living expenses. Still, they are grateful for any support.

A few said they did not receive any financial aid from the government and asked how to apply for it. Not all were aware of the Sumbangan Asas Rahmah (Sara) one-off RM100 cash assistance for Malaysians aged 18 and above to purchase certain provisions effective from November to December this year via their MyKad. There should be a more effective system of keeping the elderly informed of government aid, and how to apply for it.

This is the reality on the ground for these families in the B40 group.

Lily Fu is a gerontologist who advocates for seniors. She is the founder of SeniorsAloud, an online platform for seniors to connect and enjoy social activities for ageing well. The views expressed here are entirely the writer’s own.

(The above article was first published in the print edition of The Star on Wed 19 Nov 2025. The online version can be accessed at https://www.thestar.com.my/lifestyle/family/2025/11/20/the-age-of-financial-uncertainty)

THE POWER OF COMMUNITY IN OUR AGEING SOCIETY

 

There's a poignant adage that while one mother can care for ten children, ten children often struggle to care for one mother.

Personally, I feel we can no longer bring this up each time there is a discussion about elderly neglect, abuse or abandonment. In the first place, it is becoming a rarity these days to find a family with more than five children. The demographics show a steady decline in the fertility rate. It currently stands at 1.9, down from a high of 2.9 in 2000. The average of one or two children is becoming the norm now for young couples.

Furthermore, children will eventually leave the family home to further their studies or seek employment elsewhere either locally or abroad. The end outcome is the rise in the number of empty nesters. An estimated 10% of our senior citizens live alone. This trend is continuing. Smaller family size means fewer siblings to share the financial, physical and filial responsibility of taking care of their elderly parents.

Not all children will support their parents in their old age. Some can afford to, but choose not to because of long-standing family friction. Many have their own financial commitments to grapple with and a young family to raise. Whatever the case or circumstances, the fact is elderly parents have to fend for themselves.

If they have sufficient savings to see them through the retirement years, well and good. But with advancing age comes a host of health issues, especially non-communicable diseases like diabetes, cancer, stroke that require long term care. The situation is further compounded by soaring medical costs and insufficient or no medical insurance coverage.

Living long, living well

Unless we enjoy good health in our golden years, we’d rather not live to “a ripe old age” if our days are filled with pain and total dependence on others. That’s why we often hear the elderly say it’s better to die than to have no quality of life and be a burden to others.

With longevity, it is not uncommon to find an elderly couple looking after each other in their twilight years. One frail elderly caring for another who is just as frail or worse. Longer life expectancy also means having two sandwich generations – adult children in their 40s looking after their parents in their 70s. And retirees in their 70s looking after their parents in their 90s!

If we factor in the elderly in-laws, that’s a total of at least eight elderly members from both sides and two young children to be responsible for. That’s enough to make young people think thrice about marriage and raising a family.

Reflect on that, and perhaps we can understand why the government is hesitant about introducing a Maintenance of Elderly Parents Act. It has been brought up now and again during the past 20 years or so. But till today, nothing concrete has materialised as far as the Act is concerned. The government is reluctant to hold adult children fully responsible for not taking care of their parents. They may want to but their financial situation may not allow them to do so.

When it comes to taking care of mum and dad, the role of the primary caregiver invariably falls on the daughters, more often than not, on the unmarried daughter. She becomes the obvious sole or primary caregiver. It is a 24-hour responsibility. She does not get any respite, any relief unlike professional staff or relief workers in aged care facilities. They get to enjoy shift work, and go home when the work day is done. They get to destress and recharge for the next day.

It helps if the sole caregiver is able to take a break. That is why we encourage everyone to have a small inner circle of close friends, that can drop by on a regular basis to chat, play a game of mahjong or bridge or have a cookout. Buddies will do that for one another. Looking after an elderly person for a sole caregiver can be lonely and depressing, more so if the elderly person has health issues, is cranky and requires assistance with daily activities. Caregivers need a break from the demanding routine of care duties to avoid burnout.

The columnist (second from left) took part in the recent Care Summit at KLCC which brought focus not only on eldercare, but also care for special needs children. — LILY FU

Available, accessible, affordable

Aged care facilities, daycare centres andhome care services are available but not easily accessible or affordable to every family with an elderly member that requires looking after. Eldercare must meet these criteria: Availability, accessibility, affordability.

All three can be found where we live. It is time for residents’ committees together with the property management team to step up and work together, to go beyond just overseeing the place and collecting maintenance fees.

It’s time to promote the community spirit of neighbours helping neighbours by organising activities to encourage interaction, cooperation, and build trust among residents so that they can reach out and offer assistance whenever a call goes out for help. This can be easily done via a residents’ WhatsApp group to connect a resident looking for a daycare companion for her elderly mother, and a resident who can provide that service. Housewives and retirees make excellent companions for the housebound elderly.

This arrangement can be done on a voluntary basis or for a fee. For the daughter who has full-time job, it means welcome relief to know her mother is safe at home in the company of a neighbour whom she knows and trusts.

Another proposal is to have eldercare services at the work place. Childcare facilities are already available at certain workplaces. This service can be extended to include eldercare. Adult children can leave their parent there rather than leave them alone at home. In fact, retired older persons who are still fit and mobile can be a great help at these facilities either as volunteers or staff members. We have seen in our own families how grandparents and grandchildren enjoy a special bond.

As for the sole caregiver, it is of paramount importance that she has access to outlets and opportunities to destress. A stressed-out caregiver will not only suffer physical and mental health issues, but may inflict physical and psychological abuse on the care recipient. A burnout carer will do more harm than good.

She can join a caregivers’ support group, for example the Alzheimer’s Disease Foundation Malaysia (ADFM), and participate in the activities. She gets to meet other caregivers, share their stories and support one another. Siblings can take turns to do shift duty and look after their elderly parent. It’s a whole-family hands-on approach to caregiving. Unfortunately, this is not always possible. Hence the need for out-of-the box ideas that may or may not work, but are worth a try.

The Selangor state government should be commended for taking the lead in organising the Care Summit from Oct 9 to 11 at KLCC. It brought focus not only on eldercare, but also on caring for OKU and special needs children. Equally welcomed is the emphasis on caregivers, to seek solutions to support them in their caregiving role.

The researchers have done their work in collecting and ­sharing data, the conference speakers have raised awareness through their talks and the ministry representatives have given their feedback to the policy-makers. Let’s hope it doesn’t stop there. The proposals raised should not languish at the various ministries gathering dust before they finally see the light of day, if at all.

All of us have parents. All of us will grow old one day. We can’t wait for something drastic to happen before we take corrective action. If bureaucratic red tape is unavoidable, let us take the initiative to introduce some of these proposals to our communities, and volunteer to get them implemented. It’s time to act.

Lily Fu is a gerontologist who advocates for seniors. She is the founder of SeniorsAloud, an online platform for seniors to connect and enjoy social activities for ageing well. The views expressed here are entirely the writer’s own.

(The online article is accessible at https://www.thestar.com.my/lifestyle/family/2025/10/22/the-power-of-community-in-our-ageing-society)