Rm3 6m Retirement Plan Exposes Great Disparity Rues Psm

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PSM deputy chairperson S Arutchelvan responded with an “astonished face” emoji when an article on the retirement plan of affluent Malaysians was forwarded to him via WhatsApp.
Quoting HSBC’s Quality of Life Report 2024, the article stated that well-heeled Malaysians cited RM3.61 million as the magic figure for a comfortable retirement.
Struggling to fathom the divide between the Malaysian upper and working classes, Arutchelvan (above) said: “This report exposes the great disparity in Malaysia.”
The PSM leader contrasted the HSBC report with the Employee Provident Fund (EPF) recommending having a minimum of RM240,000 at the age of 55 to allow Malaysians to muddle through the next two decades with RM1,000 per month.
“However, Khazanah Nasional stated that only 10 percent of EPF contributors aged between 30 and 54 will be able to reach this benchmark.
“This means 90 percent of Malaysians won’t be able to retire at the age of 55,” he told Malaysiakini.
Arutchelvan also pointed out that most elderly people in Malaysia cannot rely on their children, who face similar hardships as well.
“That is life for the B40, at least. This says a lot about the great disparity among the rich and the poor in Malaysia,” he added.
Arutchelvan said while the rich complain about the minimum wage being raised, there is hardly any reflection on how much some of them earn, including GLC chief executives raking in RM100,000 a month.
“There is no attempt to cap higher salaries,” he added.
Arutchelvan said the poor would keep asking for more EPF withdrawals, which in turn would deplete their savings further, and politicians would agree to this as it is a populist position.
“It is a pity there is not much discussion on how to deal with this great disparity and how to ensure that 90 percent of Malaysians can retire as well.
“At present, retirement remains a distant dream for most.
“These Malaysians are not even asking for ‘comfortable’ sunset years. They are just waiting for the ‘new dawn’ which some politicians promised. But a minimum wage of RM1,700 continues to eclipse their hopes,” he added.
PSM was disappointed with the government’s RM200 raise for the minimum wage from RM1,500 to RM1,700 in the Budget 2025.
Based on the government’s minimum wage formula which takes into account the poverty line income, average workers per household, median wage, labour productivity growth, consumer price index and unemployment rate, PSM said that the minimum wage for urban workers should be RM2,568 and RM1,884 for those in rural areas.
Given the weightage, PSM calculated the average minimum wage to be RM2,444 but pointed out that it would have been satisfied with RM2,000.
Previously, Arutchelvan also disputed the Human Resources Ministry’s claim that the RM1.700 minimum wage was unanimously supported by workers.
Financial planning
The HSBC survey defined affluent individuals as those having investable assets of US$100,000 to US$2 million.
The amount is lower than those surveyed in Hong Kong (US$1.08 million) and Singapore (US$980,000), but higher than in India (US$390,000) and Indonesia (US$340,000).
The report surveyed over 11,000 affluent individuals across 11 markets including Malaysia. Of the Malaysian respondents, 73 percent stated that they were on track to meet their financial targets.
"Savings alone may be insufficient, and this is where financial planning and making the right investments and protection decisions is imperative, which is what the Quality of Life Report 2024 emphasises.
"With Malaysia's expanding economy and its pursuit of becoming a high-income nation, it is befitting that affluent respondents in Malaysia say that they allocate almost a quarter (24 percent) of their monthly income towards investments, thus underscoring the importance of financial planning for the future," said HSBC Malaysia head of wealth and personal banking Linda Yip. - Mkini

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