Ros Idayuwati Alaudin

Retirement adequacy is essential for maintaining the standard of living obtained during the working years. The purpose of this research is to apply the quantile Retirement adequacy is essential for maintaining the standard of living obtained during the working years. The purpose of this research is to apply the quantile

Retirement adequacy is estimated using Malaysian Household Income Survey (HIS) 2009 data based on 5881 sample of households with information on income, demographic and socioeconomic characteristics of each household.The adequacy of retirement income is assessed by comparing accumulated projected wealth of an individual’s work life at retirement age with his/her total consumption (needs) in retirement. From the idea of life cycle model, the desired retirement income is to maintain the preretirement level of living throughout retirement.Therefore, retirement wealth can be defined as adequate if the total retirement income is equal or greater than the total desired retirement consumption.Based on the wealth-need ratio projections, 69% of households are adequately prepared for retirement.Besides the projection of retirement adequacy, a logistic regression is performed to determine the demographic and socioeconomic determinants of retirement adequacy. In addition, optimistic and pessimistic scenarios are projected to discern the effects of retirement and investment factors on retirement wealth adequacy

Adequacy of retirement income is very important to maintain a comfortable living standard during retirement. Under a life cycle model, assets are mainly accumulated during an individual’s work life to finance consumption after retirement. A generally accepted goal of retirement planning is to provide enough income during retirement to prevent the level of living from dropping much below the pre-retirement level. Retirement wealth can be defined as adequate if the total retirement income is equal or greater than the desired total retirement consumption (or needs). In this study, retirement adequacy is projected using the Malaysian Household Income Survey (HIS) 2009 data which is based on 5881 sample of households and contains information on income, demographic and socioeconomic status of each household. Besides the projection of retirement adequacy, a regression of the ratio of projected wealth to needs (or wealth-needs ratio) is performed to investigate the demographic and socioeconomic determinants of retirement adequacy in Malaysia. The results show that 69% of households in Malaysia are adequately prepared for retirement.