This article first appeared in The Edge Financial Daily on July 1, 2019 - July 7, 2019

KUALA LUMPUR: Businesses and individuals should rethink their strategies to thrive in an ageing world, according to speakers at the Third Age Economy Symposium organised by The Edge Malaysia on Saturday. The symposium was themed “Turning silver into gold.”

The baby boomers are a market that cannot be ignored due to their considerable spending and investing power, said Datuk Ho Kay Tat, publisher and group chief executive officer of The Edge, during his opening remarks. Many people from this generation are healthier and live longer than their predecessors.

“We are also mostly financially better off because of better access to education and better job and business opportunities brought about by a relatively peaceful environment in Malaysia and the region in the past 40 years or so.

“And although baby boomers are either retired or near retirement, we are still young enough to take advantage of the rapid digitalisation of everything around us that will surely make our lives better,” Ho said.

According to Universiti Malaya’s Social Wellbeing Research Centre, the number of people aged 60 and above is expected to reach 3.5 million next year in Malaysia. In 2040, this figure is expected to rise to 6.3 million, making up about 20% of the population. This shows baby boomers are a big market for those who are able to create products or services that suit their interest and needs, added Ho.

The advancement of technology has a huge potential to help seniors improve their quality of life, said Dr Teh Pei Lee, associate professor at the School of Business in Monash University Malaysia. In her presentation titled “Technology for life tomorrow”, she said many high-tech products and services targeting seniors nowadays are not designed with the users in mind.

“I have spoken to some engineers who were working on prototypes for this market. They tell me they want to install various sensors to enhance the ability of the end product. I told them that is not necessary. Why design fancy products if they are not actually addressing the needs of the seniors? They should think more about the intended users and how they would respond to the technology if they want to come out with something truly meaningful,” said Teh. She is also the director of the university’s Gerontechnology Laboratory, which aims to translate research into new products and services as well as shape public policies to improve health and well-being of older people.

Anton Alers, country principal of VERITAS Architects Australia, in his presentation titled “Design for the future: Not just the present,” said that property developers should embed assisted living and aged care components into their master plan instead of adding it as an afterthought.

“Aged care and assisted living facilities add immeasurable value to the overall development project. Just as developers often let private schools come in at a bargain price because they know it’s going to add value to their overall townships, maybe it’s time they started looking at different financial models to set up assisted and retirement living enclaves within said townships,” he said.

The global ageing trend has also created a need for better retirement planning strategies. In his keynote address titled “The third age: The end of the beginning, not the beginning of the end,” Nurhisham Hussein, head of the economics and capital markets department at the Employees Provident Fund (EPF), pointed out that about 65% of members have savings of less than RM50,000 in their EPF accounts. About 50% of its members above the age of 55 exhaust their EPF savings within five years.

That amount of savings might not be sufficient to cover post-retirement life due to longer life expectancy. According to Nurhisham, life expectancy of people will gradually increase alongside the advancement of the global economy. Adding to this is the rising cost of healthcare as a person ages.

“This is a problem that many countries are grappling with. The fact is that productivity growth in the healthcare industry has either not grown at all — or even has negative growth — over the years,” he said.

On wealth management, Danny Wong, CEO of Areca Capital Sdn Bhd, advised participants to guard against the long-term effects of inflation on a portfolio.

“Official figures for May this year show that inflation stood at 0.2%. This figure is similar to that of April and March. However, back in December 2009, a 1kg pack of sugar costs just RM1.45. Today, it costs RM2.85 [nearly double the price over 10 years]. This is just one of the ways in which your portfolio gets smaller over time, thus affecting your retirement prospects,” Wong said in his presentation titled “Managing your golden wealth.”

He reminded investors, particularly baby boomers, not to discount the benefits of a well-managed and diversified portfolio.

“A persistent myth is that retirees cannot afford to have risk assets in their portfolio. And many people believe equities are very risky. They invariably put their funds into low risk assets, which predictably, yields them very low returns. Unfortunately, this doesn’t protect your portfolio against creeping inflation over the years. Retirees need to take this into account before deciding on how much money they would need over a particular time horizon,” he said.

Meanwhile, the changing nature of work and workforce composition means there will be a greater demand for seniors to contribute their talent and expertise. In her presentation “The silver talent: Our nation’s untapped potential”, Sharmila Sinnathurai co-founder of Hire.Seniors, noted that in the late 80s, a large chunk of the workforce consisted of younger people and as they age, the number of older people in the organisation becomes smaller. However, this trend is set to change by 2025.

“You will see that the age gap in an organisation’s distribution of employees will become smaller and there will be more people from the older age bracket, who are above 40 and 50, that will actually be in the workforce,” she says.

“What is also going to change and become more important in organisations are jobs that are more relationship-based and jobs that are more expertise-based. And that’s where the investment and need of talent is going to come in.” Hire.Seniors is a platform that helps older adults look for post-retirement career opportunities.

The event was held at the Mandarin Oriental, Kuala Lumpur with over 300 people in attendance. Areca Capital was the main sponsor of the symposium. Other partners and exhibitors at the event were Gamuda Land, Matrix Concepts, Rozel and Sharp.