How Malaysia can raise its retirement age from 60 to 65: Experts explain the math and more

KUALA LUMPUR, Oct 15 — Malaysia's minimum retirement age of 60, for both private sector employees and civil servants, is due for an increase to at least 65, according to global pension expert William Price. Price believes the retirement age should gradually rise as Malaysians are living longer. He explained that this change would be psychologically and practically easier to manage if implemented in a step-by-step manner, rather than a sudden jump.

For instance, employers could gradually increase working hours by three months for each year until the retirement age reaches 65.

Price also proposed linking the retirement age to life expectancy figures provided by the Department of Statistics Malaysia. This would ensure that the retirement age remains appropriate based on the actual longevity of the population. If life expectancy remains unchanged, the retirement age would stay the same. However, if life expectancy increases, the retirement age could be adjusted accordingly to match the new average lifespan.

Furthermore, Price suggested that those who started working at a younger age could have a different retirement age than those who began working later in life. This would ensure fairness to those who have made more significant contributions to the system over time. Finally, Price proposed that retirement savings could be accessed at a similar increased age, providing workers with a buffer to support their transition to retirement.