KUALA LUMPUR (Feb 13): Employees in Malaysia see owning a second property as an important investment to bolster their retirement funding, a survey revealed.
In a HSBC’s survey titled The Future of Retirement: A Balancing Act, the bank noted 83% of working age people in Malaysia either already own or are planning to own a second property. The percentage figure is double that of 43% in overseas.
The survey also revealed unconventional forms of supplementary retirement funding sources are gaining popularity, with 76% of working age people in Malaysia planning to rely on returns from gold, jewellery or diamonds, 32% on antiques, 25% on paintings or works of art and 28% on classic cars.
The shift to diversify retirement funding sources with unconventional methods is underpinned by fear among a significant portion of employees that they will have little or no money to retire.
The survey also revealed an eight-year savings gap where, in an average 19-year retirement, working age people in Malaysia expect to run out of their retirement savings and investments after just 11 years.
The report noted this will heighten existing fears over finances in later life, whereby 88% of working age people in Malaysia are already concerned they will have insufficient money in retirement to live on day-to-day and 81% fear they will run out of money altogether.
“These fears will become a reality, when people enter retirement and realise they face a significant savings gap,” the statement read.
While well over half of working age people remain confident in the potential for personal pension schemes (70%) and employer pension schemes (69%) to generate income during retirement, concerns remain these may not provide enough for a comfortable retirement – prompting many to turn to extra sources of support.
HSBC Malaysia Retail Banking and Wealth Management head Lim Eng Seong said the research findings show many people are realising they are not suitably equipped for a comfortable retirement, and some people are choosing to build their retirement pots using alternative methods.
“While it may be beneficial to diversify retirement savings, different ways of saving come with their own different challenges,” he said.
“When planning for a comfortable retirement, it is important that people seek professional advice to select the savings and investments that match their individual needs, risk appetite and overall financial position,” he added.