Raising the retirement age will benefit younger generation, too

New Straits Times

26-05-2025

RECENTLY, Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said proposed that the government raise the retirement age to 65.
Is this the right response to Malaysia's ageing population?
Globally, the average retirement age was around 65 in 2020, with many countries already pushing beyond this.
Australia has set its retirement age at 67 and Canada and Brazil at 65, with Singapore gradually increasing its re-employment age from 65 to 70.
Malaysia last revised its mandatory retirement age to 60. In 2015, the Congress of Unions of Employees in the Public and Civil Services proposed an increase to 62 for civil servants.
A good example is Prime Minister Datuk Seri Anwar Ibrahim, who continues to lead the country at the age of 78.
On the other side of the world, Warren Buffett, at the age of 94, remains the chairman of Berkshire Hathaway, one of the world's largest investment firms.
Employment trends in Malaysia show that when older workers are engaged, youth employment also rises.
The same trend has been observed in many Organisation for Economic Cooperation and Development countries such as the United Kingdom, Finland, Sweden and Japan. Older and younger workers bring different strengths.
While older workers offer experience, maturity and institutional knowledge, younger workers bring innovation and adaptability to new technology. Rather than competing, these two generations can complement each other.
Together, they create a well-managed, inclusive workforce that benefits the economy.
Extending the retirement age should not be seen as a barrier to youth employment or promotion. It's a mistake to believe that older workers will block their career progression.
The reality is that the number of older adults is increasing and they will soon outnumber youths.
We need this group to remain economically active. Our workforce simply isn't large enough to rely on young people alone. Without the older adults, we risk facing a severe shortage of labour in critical sectors.
The retirement policies we decide on today will directly affect the same young Malaysians once they are in their 50s and 60s. If we don't act now, they too may face a financially insecure old age.
Also, can most Malaysians afford to retire at 60?
According to Khazanah Research Institute and Employees Provident Fund (EPF) data, only 36 per cent of EPF members meet the basic savings threshold of RM240,000 by age 55. This amount would allow only moderate monthly expenses for around 15 years.
But what happens after that? Malaysia's life expectancy stands at 78.2 years for men and 80.9 for women. That means, on average, Malaysians need savings that can last 18 to 20 years after retirement.
Without sufficient retirement savings, older adults face financial insecurity. Stretching the retirement age, with the right support in place, will allow older people to remain financially independent.
Raising the retirement age isn't about forcing everyone to work longer. It's about helping those who can and want to remain active, financially independent, and socially engaged. It should be based on individual capacity and willingness.
Working longer is not a punishment. It is the key to a secure retirement and continued social engagement. We must begin viewing older adults not as dependents, but as a valuable asset to the nation.
Stretching the retirement age is not simply a policy choice: it's a necessary conversation about how we value older people in society.
It is time we embraced a more inclusive and forward-thinking approach to ageing and employment that recognises the reality of our demographic transition and empowers Malaysians of all ages.
To the younger generation, this policy is not a threat to your place in the workforce. One day, you, too, will reach that phase and hopefully still be healthy, capable and wanting to contribute.