The Optimum Age of Retirement Index (OAR-Index): The Case of Malaysia

Abstract

This paper proposes a list of crucial factors that can be considered as a template for universal retirement plan. Malaysia is used as the base of our modelling. Ten crucial factors that are identified to have an affect directly or indirectly on the retirement plan among the three largest races in Malaysia namely the Malay, Indians, and Chinese are examined. The main objective of this research is to propose a new approach to evaluate the optimum age retirement for Malaysians in general. Hence, this new index is entitled “The Optimum Age Retirement Index (OAR-Index). The study finds that it would serve Malaysia well to increase the retirement age of the country’s workforce and proposes a number of recommendations and policies to complement the retirement-age extension.

Keywords: Retirement, Malaysia, Health care, EPF

JEL Classification: I1 and I3