LAYING THE RIGHT FOUNDATION FOR A HAPPY AND SECURE RETIREMENT

CEO of EPF, Tan Sri Azlan Zainol giving the keynote address at the conference. (Pic: The Star)

I would like to share some of the messages I took home from the 2011 Conference on Private Pension and Healthcare which concluded yesterday.

From Tan Sri Azlan's speech:

• 7% of the population (almost 2m) is aged 60 and above.
• 73% of EPF contributors had less than RM50,000 saved.
• Only 17% had over RM100,000 at the point of their retirement.
• 70% will use up all their money in three years.
• Only 15,000 contributors have more than Rm1m in their EPF accounts.
• Longer life span means Malaysians today need to save enough for at least 20 years of retirement.
• Demand for healthcare and medical expenses for the aged is expected to rise significantly. The federal government's health expenditure is expected to reach RM13.2 billion.
• To help EPF members, the number of critical illness eligible for EPF withdrawals has been raised from 36 to 55.

Salient points from other speakers:

Faced with such challenges, it's never too early to start preparing for one's retirement.

With lower mortality rate and lower birth rate, the end result is a shrinking younger population looking after a rapidly growing older population. It's not difficult to imagine a ratio of 1:1 in the foreseeable future.

Some advice to take note of.

Women, especially single women with no children, take note. You are the most vulnerable and at risk if you don't start saving for your retirement NOW. Curb your expenses on lifestyle shopping.

Issues that need to be addressed, and quickly.

The following slides are taken from Dr Rahimah Mohd Arifin's presentation on "Health System Transformation". Dr Rahimah is with the Ministry of Health and is currently involved in planning for the Transformation of the Malaysian Healthcare System.



My personal take on any plans and initiatives from the government is that they always look good on paper, but take forever to move to the implementation stage. As one speaker put it, "20 years have passed, but nothing much has changed." If you have questions about 1Care, click here for some answers.

Panel speaker Emeritus Prof Datuk Dr Khairuddin Yusof kept driving home the message that ultimately our health is OUR responsibility. His advice (and I've got his permission to quote him) is DON'T see a doctor if there's nothing seriously wrong with you. The right diet and daily exercise are the keys to good health and longevity. He's 72, and in person, doesn't look anywhere near his age. Proof that his advice should be taken seriously.

Access to affordable healthcare is the fundamental right of every citizen. That is the huge challenge facing the government. Introducing 1Malaysia clinics and 1Care System is a step in the right direction, but so much more needs to be done. We have to be responsible for our health too. We cannot expect the government to deliver all the time, for the simple reason that it CAN'T!

What about the financial aspect of the equation? How can Malaysians be encouraged to save? How can investment products and insurance packages be made more affordable so that Malaysians have more opportunities to grow their money for retirement?

There's so much groundwork to be covered - family support, caregiving, trained medical staff, nursing homes, retirement housing, insurance, tax relief incentives, the list is endless. It would be a tremendous boost if parliament passed the Minimum Wage Act and raised the retirement age in the private sector to 60. MTUC has been championing the latter for 12 years!

Conferences such as this one organized by Smart Investor and Abacus for Money help to draw attention to the issues and challenges facing the country as the population ages. The urgency of the situation should be impressed upon all Malaysians. Everyone ages and everyone retires at some point of time. There are no exceptions. The price to pay for ignorance or indifference to these issues is to retire in poor health and even poorer living circumstances.