kheru2006 (kheru2006) wrote,

Facing new retirement realities

Retiring well is a dream we share. But the retirement enjoyed by our grandparents and, perhaps our parents, was, in all likelihood, different from the retirement you and I will experience.

A few years ago, I created full day seminar entitled “New Retirement Realities”. It was first offered to financial planners, financial intermediaries and interested members of the public by the Financial Planning Association of Malaysia (FPAM).

Recently, though, I discovered large companies were keen to help their staff learn about three sweeping changes to the retirement landscape:


Retirement is never the same for each of us.

Malaysia has extended our national retirement age. The public sector has seen it move from 55 to 56 to 58 and now, to 60. The private sector made that change in a single leap, from 55 to 60.

However, more must be done. Around the world, countries most serious about ensuring long-term economic viability for their citizens have settled on retirement ages ranging from 65 to 67.

In the aftermath of the global financial crisis of 2007 to 2009, the decimation of countless investment portfolios resulted in many people realising they would need to work another five to 10 years to make up for the monumental setback.

Despite Malaysia’s official retirement age of 60, I often work with clients who tell me their desired retirement age is between 65 and 70.

What about me? I wear three professional “hats” — consultant, professional speaker and writer. I love each job so much that, God willing, my planned retirement age is 75.

In truth, though, many more people would delay their retirement out of financial fear rather than personal passion.

According to a June study by Manulife Asset Management, “… almost 50 per cent of Malaysian investors ranked healthcare as one of their top five financial goals”. (The report, “Aging Asia 6—One Step Forward, Half a Step Back: Meeting Financial Goals in Asia”, may be accessed at

The report went on to state that even though the Malaysian public healthcare system was publicly provided and heavily subsidised by the government, “… research reveals that out-of-pocket healthcare spending in Malaysia increased a daunting 11.9 per cent per annum over the past five years”.

People will work longer because lengthening the inflow of active income truncates full-blown retirement.

We are choosing to work longer because we are living longer.

All this is great news. However, we can’t escape in the singular truth that the longer we live the more money we will need.


Also, the healthier we are in old age, the more we can do and, therefore, the more we will want to do.

The longer we work, the greater the likelihood we will generate more active income from our toil and thought, and more passive income from our portfolios.

Many of tomorrow’s semi-retirees and retirees at 70 will be in better shape than their parents were at 60; we will have legions of spry geriatrics scuba diving, mountain climbing and marathoning.

I also envisage, over the next three decades, waves of wealthy retirees forming the backbone of the experimental space tourism industry. (To learn more check out the progress of Richard Branson’s Virgin Galactic (, Jeff Bezos’ Blue Origin ( and Elon Musk’s Space X (


Growing your income faster than inflation erodes it is essential.

So, if economic salvation is unlikely to come from the government, and if the past norm of long-term employment with one single, stable company is evaporating like dew under the sun, what are we supposed to do to prepare for the new retirement realities awaiting us around the bend?

Channel unspent slices of your active income into a well-diversified portfolio over several decades to create a future flood of passive income that will allow you to thrive within the new retirement realities of the mid-21st century.

Rajen Devadason, the writer is a Securities Commission-licensed financial planner, professional speaker and author. Read his free articles at He may be connected on LinkedIn at or followed on Twitter @RajenDevadason or emailed at  NST Opinion 24 August 2015
Tags: retirement

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