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Retirement Age in Malaysia & How It Impacts You [2024]

What is the legal retirement age in Malaysia and are you ready to retire?

The legal retirement age in Malaysia is 60 as regulated by the Minimum Retirement Age Act 2012. This applies primarily to private sector employees. However, with longer lifespan and increasing cost of living, is the current retirement age still relevant?

Many retirees will find themselves in financial difficulty if they have not planned their retirement carefully. They may be required to continue working beyond the legal retirement age. This is subject to an agreement between the employer and employee.

These are questions I constantly ask myself. Am I going to eventually be able to afford living comfortably till I kick the bucket? In this article, we will be looking at the retirement age in Malaysia, including the legal minimums and the possibility of extending work. We will also touch upon the ongoing debate surrounding the future of retirement in the country. This article will give valuable advice for young professionals beginning their careers or nearing retirement.

Retirement age in Malaysia

Minimum Retirement Age and What It Means

In Malaysia, the minimum retirement age for employees is regulated by the Minimum Retirement Age Act 2012. The minimum retirement age shall be upon employee reaching the age of 60 years.

This means that an employer cannot prematurely retire an employee before the employee attains the age of 60. Employers who commit this offense face penalties. An employee who is forced to retire prior to attaining 60 can file a complaint to the Labour Office for unfair dismissal.

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What if I want to retire earlier?

If there is a collective agreement between the employer and employee, it is possible for the employee to retire voluntarily before turning 60. Other than having an agreement with your employer, it is also important to know what you want to achieve with early retirement. Some may want to travel extensively and see the world, some may want to indulge in their hobbies, some may want to dedicate their life to charity and volunteerism, and many more. Of course, having these plans also means that you need to make sure that you are going to be financially ready for the lifestyle you desire upon retirement.

Retirement Beyond Minimum Age

Employees who reach 60 and still posses the drive and skills to excel can continue working with their employer’s consent. Experienced employers bring invaluable knowledge and expertise to the table; however this flexibility sparks an ongoing debate. Some advocate raising the retirement age to capitalize on this experience workforce while others emphasize the importance of creating opportunities for younger generations to enter the job market.

If you intend to continue working past the legal retirement age, this needs to be mutually agreed by you and your employer.

Official Retirement Age in Malaysia

In conclusion, Malaysia’s retirement age landscape offers a minimum threshold of 60, as outlined in the Minimum Retirement Age Act 2012. This protects employees from premature dismissal and provides a foundation for retirement planning.

Regardless of any potential changes to the official retirement age, one thing remains clear: proactive planning is crucial for a secure and fulfilling retirement. As Malaysia navigates its evolving demographics and economic landscape, the future of retirement promises to be an interesting space to watch, with potential for further adjustments to ensure a thriving future for all.