Extended retirement age may also benefit employers
Published on: Sunday, December 05, 2021
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Credit: knowledge.wharton.upenn.edu
There is a host of positives to retiring at 60 or below. From the personnel/employee’s perspective, this may include more freedom, opportunities to travel, more time to devote to family and loved ones, improved health or a chance to start a business venture that one is enthusiastic about.
When retirees meet, they always express positive comments like “You look younger”, “You look better” and other similar positives that can be deduced from a more stress-free and happier life.
There are, of course, downsides as well, including lack of challenges, fewer social connections, the strain on savings and potentially depressing effect on mental health.
Thus, working longer allows you to add more to your retirement savings.
An extended retirement age may also work better for employers, as they would then need to spend less on training and developing new recruits.
The issue of extending the retirement age needs to be examined holistically, and whatever is decided will have to be applied to all workers be they in the private or public sector.
It is also important that the extension of retirement age be not executed selectively on individuals, as this may lead to favouritism and abuse, and may promote cronyism and corruption.
We also have to think about giving opportunities to those who are entering the job market, particularly in the government sector, rather than extending the life of “dead wood” or unproductive personnel.
This is especially so in the elite administrative sectors in government. Civil servants should retire at 60 to make way for the younger administrators who have been trained and are waiting in line.
This exercise must be seen together with the idea of downsizing some redundant posts in the civil service.
Sixty may not be too early to retire; studies have shown that some workers start to feel burned out at formal workplaces when they reach their late 50s.
In its 20 years of tracking retirement trends, Gallup has reported that in the pre-pandemic years in 2019 and 2020, the average preferred retirement age was 61.
As a comparison between demographic characteristics, the average person in Britain retires at 65 with a life expectancy of 81, which is only a 16-year retirement to finance.
The average person in Malaysia retires at 60 with a life expectancy of 76, which is also a 16-year retirement period to finance.
So, doing a simple comparative analysis on life expectancy, Malaysia’s retirement age at 60 is generally acceptable.
But if the government wants a compromise between World Bank advice and local realities, 62 may be an acceptable age to retire.
However, we are not obliged to follow the World Bank’s recommendation when there are many local realities to consider.
There is still time to consider this matter thoroughly from all angles.
With the Covid-19 crisis in our midst, there is genuine concern about the unemployment issue, particularly among university graduates who are waiting to enter the job market.
Tan Sri Lee Lam Thye
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