Boasting a warm weather year-round, nature landscapes and vibrant street food scene, Malaysia could be a place of your choice to retire in. According to US-based financial services corporation Nasdaq, Malaysia ranked first as the best place to retire in Asia in 2023.
When deciding where to spend one’s retirement years, one of the main factors to consider is the cost of living. During retirement, your needs and priorities will change and you will no longer have a steady paycheck every month.
So, how much would you need to retire in Malaysia compared to other countries?
Read Also: Which States In Malaysia Are The Most Affordable To Live In As A Retiree?
Average Savings Needed To Retire In Malaysia And Other Countries
Recently, HSBC Bank released the Quality of Life Report 2024, which captured the insights of more than 11,000 affluent individuals regarding their retirement plans.
According to the report, affluent investors in Malaysia believed they need to have an average savings of US$830,000 or RM3.7 million to retire.
The affluent in countries such as the US, Hong Kong and Singapore recorded the highest average savings needed to retire at US$1.13 million (RM5.0 million), US$1.08 million (RM4.8 million) and US$980,000 (RM4.3 million).
Average retirement savings needed to retire in countries such as Mexico, India and Indonesia are the lowest at US$500,000 (RM2.2 million), US$390,000 (RM1.7 million) and US$340,000 (RM1.5 million).
Additionally, close to half or more than half of respondents in each country plan to continue working after retirement, including in Malaysia.
| Countries | Average retirement savings needed | Percentage who plans to work post-retirement |
| US | US$1.13million (RM5.0 million) | 47% |
| Hong Kong | US$1.08million (RM4.8 million) | 58% |
| Singapore | US$980,000 (RM4.3 million) | 59% |
| Taiwan | US$930,000 (RM4.1 million) | 60% |
| China | US$870,000 (RM3.8 million) | 46% |
| Malaysia | US$830,000 (RM3.7 million) | 48% |
| United Arab Emirates | US$790,000 (RM3.5 million) | 57% |
| UK | US$630,000 (RM2.8 million) | 45% |
| Mexico | US$500,000 (RM2.2 million) | 52% |
| India | US$390,000 (RM1.7 million) | 58% |
| Indonesia | US$340,000 (RM1.5 million) | 54% |
Source: HSBC
Read Also: What Happens To Your EPF Savings If You Continue To Work After Retirement Age?
Retirement Readiness
Based on HSBC’s report, a comprehensive financial plan that leads to long-term financial security consists of healthcare protection, wealth accumulation, retirement and legacy planning.
More than half of the affluent clients of HSBC plan sufficiently for healthcare protection. This may be attributed to the finding that the top retirement concerns are decline of health and rising healthcare costs.
A notable observation from the report is also that most of the affluent are lacking when it comes to legacy planning, which includes not only the passing of wealth to future generations but also passing of values and performing charitable acts.
However, more than 50% of the respondents are aware of the importance of legacy planning which includes making arrangement for future financial obligations such as education and healthcare of their children and preparing for unexpected events such as death and incapacity.
Staying On Track With Your Retirement Plans
When it comes to saving, it’s important to have a specific amount you want to save. Most of the affluent are aware of the amount needed for their retirement.
In addition, 83% of the respondents also periodically review the performance of their retirement savings regularly. This way, they are up to date with their progress and are able to stay on track with their retirement plans.
Being disciplined is also very important in achieving financial goals, especially long-term goals such as retirement savings. The report revealed that 81% of the affluent adhere to their retirement saving plans.
Although most people are aware of the amount needed for retirement savings, it could still be a challenge to stay on track with their plans.
Overall, only 59% of the respondents are financially on track to meet their retirement goals. Specifically, the report showed that there is significant generation difference when it comes to staying on track to achieve retirement objectives.
Out of the different generations, Baby Boomers aged 60 to 69 are most likely to be able to stay on the path to achieve their goals at 72%.
This is followed by Gen X and millennials, with 58% and 54% of them being able to stay on track to achieve their retirement goals.
Gen Z aged between 25 and 27 are the least able to stay on track to accomplishing their retirement goals, with only 47% being on track.
However, younger generations are more likely to start investing earlier and dedicate larger portions of their income to investments. This may be due to their perception that they don’t need a large capital to start investing.
Read Also: Guide To EPF’s Voluntary Self-Contribution For Growing Your Retirement Savings
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