Retirement Planning Behaviour of Working Individuals and Legal Proposition for New Pension System in Malaysia

  •  Kamal Hassan    
  •  Rohani Rahim    
  •  Fariza Ahmad    
  •  Tengku Noor Azira Tengku Zainuddin    
  •  Rooshida Rahim Merican    
  •  Siti Kholijah Bahari    


Problems have been identified pertaining to retirement scheme of the private sector employees in Malaysia where there is no legislated pension system in force. As a result of that, pension scheme and savings are more of a voluntary basis; although the principle is good but in practice many retirees suffer financially during their retirement. The objectives of this study are to examine factors contributing to individual’s retirement planning behavior and the private pension system in the private sector in Malaysia. Retirement planning behaviour in this study was measured with series of questions on behaviour about retirement planning. A total of 500 working individuals from private sectors in the age group of 40 years and above had participated in this study. The results identified several significant variables in the prediction of retirement planning among working individuals in Malaysia, including individual who had higher levels of education, higher levels of income, financial literacy, retirement goal clarity and attitude towards retirement. There is a correlation between retirement planning behavior and saving for old aged. As a response to the result collected from the survey, a legal proposition is put forward to address issues of pension during retirement among private sector’s employees.

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