KUCHING: Malaysia could have only five workingage people supporting every elderly person by 2043, down sharply from 15 today, as population ageing places growing pressure on families, retirement savings and public finances.
Social Wellbeing Research Centre director Professor Datuk Norma Mansor and Universiti Malaya Faculty of Business and Economics senior lecturer Dr Adilah Abdul Ghapor said the country has a limited window to strengthen its financial and social support systems before demographic pressures intensify.
Writing on the newly released National Transfer Accounts (NTA) report, they said Malaysia’s relatively large working-age population provides an advantage now, but one that will not last. Malaysia’s population reached 34.4 million in early 2026, with annual growth slowing to 0.5 per cent, according to the Department of Statistics Malaysia.
Those aged between 15 and 64 still make up 70.4 per cent of the population. “The large working-age share is often viewed as a demographic advantage, but the position is temporary as Malaysia moves towards an ageing society,” they said. The challenge becomes clearer when income and consumption are examined across a person’s lifetime.
NTA data shows that Malaysians generally begin generating more labour income than they consume at around age 29.
The economic surplus peaks at about age 44 at an estimated RM14,523 per person annually before disappearing at around age 56, when consumption again exceeds labour income. That leaves a surplus-generating period of only about 27 years. During those years, workers must finance their own needs, support children and ageing parents and accumulate enough savings for retirement.
Norma and Adilah said whether workers can do so depends heavily on wages. Productivity increased 7.4 per cent between 2022 and 2025, while real wages declined by about 1.9 per cent over the same period, according to figures they cited.
Wages also account for about 33 per cent of gross domestic product, compared with between 50 per cent and 60 per cent in more developed economies.
They said weak wage growth could prevent workers from converting their most productive years into sufficient savings and assets.
The problem is already visible in the financial support flowing between generations. More than half of elderly Malaysians rely entirely on cash from their adult children, receiving an average RM526 a month, according to a Social Wellbeing Research Centre study cited by the authors.
The Malaysia Ageing and Retirement Survey Wave 2 also found that 85 per cent lived in multigenerational households, while 35 per cent of adult children directly paid for the care of a parent or parent-in-law.
Limited Employees Provident Fund savings among those beyond age 65 further increase dependence on family members once retirement funds are depleted. Norma and Adilah said such transfers reduce the amount working adults can put towards their own retirement, housing, healthcare, childcare and education.
This is particularly significant for the sandwich generation, which has to support ageing parents while financing its own households and preparing for retirement. While family support remains an important strength, they said shrinking family sizes, migration, higher living costs and longer lifespans mean households cannot be expected to absorb an evergrowing share of ageing costs.
Formal systems therefore need to complement rather than replace family support. Retirement adequacy, they said, begins with earnings.
Under a projection based on a 35-year career, standard statutory EPF contribution rates and average long-term investment returns, a worker starting on RM1,700 could accumulate about RM750,000 for retirement.
A worker starting at the national median wage of RM3,167 could accumulate closer to RM1.4 million. Every additional RM100 in starting pay could add between RM50,000 and RM70,000 to lifetime retirement accumulation. The figures underline the importance of starting wages because money accumulated earlier has more time to grow.
Norma and Adilah said strengthening retirement adequacy while Malaysia still has a large working-age population would give households and policymakers more room to prepare before the workerto-elderly ratio falls further. Healthcare and long-term care are another source of pressure.
With consumption beginning to exceed labour income again at around age 56, they said financing systems should be strengthened before demand accelerates. Otherwise, more healthcare and senior care expenses could ultimately fall on adult children.
They called for greater government funding for healthcare and senior care, alongside stronger retirement mechanisms and earlier financial education.
Among the retirement measures proposed were closer adherence to EPF minimum savings targets, mandatory minimum savings targets, greater contribution flexibility for gig and informal workers and consideration of automatic enrolment.
They also proposed extending Malaysians’ economically productive years by encouraging those above 60 to take up flexible, part-time, advisory and age-friendly work.
Higher female labour force participation could provide another source of economic support, particularly by helping women who left employment because of caregiving responsibilities return to work.
Norma and Adilah also called for household financial transfers and informal caregiving to be captured more systematically in national data. Doing so, they said, would give policymakers a clearer picture of how much of the ageing burden families already carry and where formal support will be needed as the worker-to-elderly ratio moves towards 5:1.
