Growing Number of Older Workers Highlights Strain on Malaysia’s Retirement System
KUALA LUMPUR, May 1 — The rising number of Malaysians aged 60 and above remaining in employment is shedding light on deeper structural challenges within the country’s retirement system.
This trend reflects a shifting economic reality in which retirement is no longer a secure life stage, but one increasingly shaped by financial pressures and insufficient savings.
According to Universiti Malaysia Kelantan academic Nik Maheran Nik Muhammad, many older individuals continue working out of necessity rather than choice.
She explained that while “active ageing” is often framed positively, it can also signal a lack of financial preparedness among retirees.
“We need to recognise that many older Malaysians are still working because they need the income to sustain themselves,” she said.
Data from the Department of Statistics Malaysia shows that Malaysia is moving towards becoming an ageing society, with those aged 60 and above expected to make up about 15 per cent of the population by 2030.
As of September 2025, more than 310,000 elderly individuals remained active contributors under self-employment schemes, indicating continued reliance on earned income.
This raises questions about the adequacy of existing retirement systems.
Nik Maheran highlighted key gaps, including insufficient savings in the Employees Provident Fund, income disparities among retirees and limited protection for those in informal employment.
She also pointed out that many workplaces are not yet designed to accommodate older workers.
“There is a need for more flexible work arrangements and environments that cater to the physical and social needs of older employees,” she said.
Meanwhile, Institute of Strategic and International Studies Malaysia economist Calvin Cheng said the growth of the “silver workforce” is closely linked to structural changes in the labour market.
He noted that many older workers are now engaged in gig or informal work, which provides flexibility but often lacks long-term security.
This trend, he said, reflects a broader decline in stable employment opportunities that traditionally supported retirement planning.
Although Malaysia has relatively developed social protection systems — including EPF, Social Security Organisation and the Employment Insurance System — significant coverage gaps remain.
“Nearly half of the workforce is not adequately protected by formal retirement systems,” he said.
Looking ahead, Cheng emphasised that population ageing is inevitable, but it also presents an opportunity to rethink how older workers are supported.
Strengthening financial security and creating inclusive workplaces, he said, will be crucial to ensuring that Malaysians can continue contributing while also having the option to retire with dignity.
-wilayah.com.my
