Save for retirement early with a 'cradle to grave' approach, says gerontologist

Gerontologist Lily Fu shares her thoughts on retirement and retiring well.

According to gerontologist Lily Fu, most people see retirement as “freedom from working formally at a company from nine-to-five”. In Malaysia, people officially retire at age 60.

“But for those who own their own business, there’s never a ‘correct’ retirement age. You usually work until you pass your company onto your successor,” she says.

It’s important to retire well, and this means preparing early, she adds.

Fu believes in a “cradle to grave” approach to preparing for retirement which essentially means “start early”.

“Don’t wait until close to retirement age to do something. Start saving as soon as you get your first job – whether it’s EPF, life savings, etc,” she advises.

The Employee Provident Fund (EPF) set the recommended minimum savings required to retire comfortably at RM240,000 by the age of 55, but many Malaysians aren’t even able to reach that amount by the time they retire.

As a general rule, you'll need two-thirds of your last drawn income to maintain the same standard of living. For example, if you earn RM7,500 monthly while working, you'll need RM5,000 monthly when you retire. If you don’t, you’ll have to live more frugally, she says.

“Good health – which is very important – also starts from young,” she adds.

“Good family relationships – especially with your children – also need to be nurtured from young,” says Fu.

“Unfortunately, seniors sometimes end up in old folks homes because they don’t get along with their children, and as a result, their children don’t want to look after them in their old age,” she highlights.

Prepare for the end

According to Fu, although it’s a topic that most people don’t like to think about, it’s necessary that retirees to prepare for the eventuality of death.

“Make a will, and include directives such as if hospitalised, whether to resuscitate, how you want to be buried, etc. It’s also important to declutter your home so that your children won’t have to do it for you post-death,” she says.

Fu admits that when she retired, she was at a loss as to what she should do.

“I found out that there wasn’t any space where I could go for more information or help. That’s why I started my own seniors’ community called Seniors Aloud 15 years ago, and began curating information useful for seniors,” says Fu.

Fu highlights that while there are many Pusat Aktiviti Warga Emas (PAWE) where they have activities for seniors, only some are well run and flourishing, while others are neglected and underutilised.

Retirees have to manage their money well so that they’ll have enough to last for the rest of their lives, says Fu.

Seniors face many challenges and especially when they’re retired, says Fu. One obstacle they face is ageism.

“When it comes to employment, companies or bosses will usually choose younger workers. But when you raise the retirement age and allow older people to work, it takes the financial burden off their children who don’t have to support them. It also takes the burden off the government who don’t have to spend so much on social welfare and free medical services because when people continue to work and stay active, they tend to maintain their health and fitness level,” says Fu.

“Ageism also occurs in education. Many retirees didn’t have the chance to further their studies when they were young and they postponed this because of family or career responsibilities. Now that they have the time to study and wish to get further qualifications, they aren’t able to apply for bank loans or scholarships because the ceiling age for applications is 45," she says.

Isolation is another danger that some newly-retired people face.

"Once they stop working, they often lose their contacts such as colleagues. Connections become rarer because their contacts are still busy working. It’s the same with their friends who are still working. And this happens more with men.

“If the retiree was working at upper management with staff at their beck and call, they might find it harder to adjust and adapt because they’re now on their own,” she says.

Manage wealth, don't fall for scams

Seniors face many challenges and especially when they’re retired. One obstacle they face is ageism, says Lily Fu.

Money management is another challenge that retirees might face.

Retirees, she says, have to manage their money well so that they’ll have enough to last for the rest of their lives.

"Previously, it was thought after retirement, people would only live another 10+ years. But now, people have longer lifespans, so they need their money to last longer,” says Fu.

“Some might get a part-time job so they can continue saving when they retire. If not, they need to manage their money very carefully and wisely. Older people aren’t stingy, they’re frugal because they need to be careful of how they spend their money and make it last,” she says.

Fu admits that “money is power”.

“In their old age, retirees often feel ‘discarded’ and that they’re nobody. But if you’ve money, people will still listen to you,” she says.

She highlights that in old age, it’s the women who suffer most, especially if they’re single and living alone.

“Because we still live in a patriarchal society, women are seen as not having as much power and money,” she adds.

Older people are also target of scammers because people perceive them as “more vulnerable and not tech-savvy”. There are always people who want to sell you things, etc. so you need to learn to recognise this and not fall prey, she advises.