Whether retirement age should be increased remains a highly controversial issue.

We are used to hearing people say that we should keep learning for as long as we live.

But no one is going to agree that we should keep working until our life ends!

Whether we like it or not, it has become a global trend for nations to increase the retirement age so that people can continue working, and earning, for a few more years.

Associate Professor Mohd Yusof Saari, Chief Economist at the Center for Future Labor Market Studies (EU-ERA), says Malaysia’s retirement of 60 is “quite young,” and has proposed to increase the retirement age to 65, having referred to the retirement ages of other regional countries.

Is 60 too young to retire? Let’s look at this issue from two perspectives: our average life expectancy, and the retirement ages of other countries.

According to the statistics department, the average life expectancy of Malaysia is 73.4 years. And according to UN statistics, the global life expectancy has also been rising steadily, and is expected to reach 77 years by 2050. Based on these numbers, Malaysians will have around 20 years after retirement.

Compared to other countries, retirement age of 60 is not too late: It’s 65 in Germany and Japan, and 63 in Singapore. Many countries are planning to extend their statutory retirement ages.

In France, the government plans to increase the statutory retirement age from 62 to 64, while Japan is prepared to take its retirement age all the way to 70!

As mentioned earlier, this is a megatrend, but as different countries are different, there isn’t a fixed rule for all.

Revising the retirement age is not without controversy. In France, the public are enraged by the government’s hardline stance in extending the retirement age, culminating in widespread demonstrations and protests.

Revising the retirement age should be done in accordance with the actual situations of individual countries. For example, Japan has no choice but to increase its retirement age because of the severe ageing phenomenon and manpower crunch.

In Malaysia, the proponents of higher retirement age have based their arguments on the fact that many retirees do not have sufficient funds to see them through their retirement.

According to the KWSP, members will need at least RM240,000 for a decent retirement, but among its 13.1 million members, as many as 6.7 million or 51.5% have under RM10,000 in their EPF savings. Even if the retirement age is extended for a few more years, they will still not have enough for their retirement.

Low savings could be blamed on low salary, and as such, the government will have to spearhead the country’s economic growth, create more quality job opportunities to increase the employees’ incomes in order to protect Malaysians’ old age.

Simply put, the government cannot simply increase the retirement age just because many Malaysians do not save up enough for their retirement.

Our conditions are different from Japan’s. Currently we have not yet become an “ageing society” and we still have sufficient manpower to propel the economy. Statistics show that we have a relatively high youth (15-24 years) unemployment rate of over 11%, meaning we do not actually need to depend on old people for labor supply.

We need to stress that higher life expectancy doesn’t imply that we must work longer. Do bear in mind that average life expectancy is not synonymous with “healthy life expectancy” (where one can still carry on with day-to-day living and mobility without much difficulty). As such, even if we live longer now, it doesn’t mean we should work longer too.

We need to look at the issue of retirement age from various factors, including our pension scheme, overall economic environment, labor supply, etc., not just life expectancy or need for old age protection.

In short, whether retirement age should be increased remains a highly controversial issue. Some say “yes,” but MEF and MTUC say “no.”

Most importantly, the government must consult the views of the public and study its implications carefully based on the needs of this country in order to come up with the most optimal solution.