Malaysia’s rich are well prepared for retirement – and it’s mostly thanks to Government pensions, a new report by Standard Chartered has found.
The bank’s Wealth Expectancy Report 2019, published on Thursday (Dec 19) surveyed 10,000 emerging affluent, affluent, and high-net-worth individuals across 10 Asian countries – including 976 Malaysians – on their saving and investment habits.
It defined the emerging affluent as those with monthly incomes between RM8,000 and RM17,800. Affluent individuals were those with monthly incomes above RM17,800, while high-net-worth individuals were those with assets worth RM4.1 million and above.
For Malaysia, respondents’ top financial goals were saving for their children’s education, investing in property, saving for retirement and starting their own business.
Close to 90 per cent of the affluent and emerging affluent in particular were concerned about transferring their wealth to the next generation, but 60 per cent of respondents voiced concerns that their children would not know how to manage the wealth they inherit.
“Wealth creators in Malaysia tend to make most of their wealth management decisions on their own, making only limited use of professional advisors,” the report said.
When asked about various methods used to grow their wealth, the vast majority of respondents – 70 per cent – said they used savings accounts. About 50 per cent said they had investment properties, and over 40 per cent said they used a fixed-term deposit scheme.
According to the bank’s predictions, all three groups of respondents were likely to have sufficient retirement savings to maintain their lifestyles – unlike in neighbouring Singapore, where savings accounts were also a popular avenue for retirement funds.
This outcome was largely thanks to the high level of statutory pensions, it added.
Based on a projected life expectancy of 91 years, the report estimated that the Malaysian respondents would have incomes of about RM18,500 a month during retirement – close to their average current monthly spending.
Close to 65 per cent of respondents would likely have sufficient retirement funds to avoid downgrading their current lifestyles, putting Malaysia in second place among all countries.
In top place was China, where 70 per cent of respondents were likely to retire without a significant change in lifestyle.