DoSM projects that by 2040, Malaysia’s demographic landscape will witness a nearly equal distribution between the young and the older population 

by ZAHIN ZAILANI 

AS MALAYSIA strides forward into the future, the demographic landscape is evolving, particularly in the context of an ageing population. Over the past decade (2012-2022), Malaysia has witnessed a gradual increase in the proportion of individuals categorised as elderly, as per the nation’s definition. 

It is noteworthy to mention that, akin to many nations globally, Malaysians generally designate individuals aged 65 and above as part of the elderly or senior population. According to the World Bank’s data as of September 2023, Malaysia’s demographic profile is demonstrating a discernible upward trend in the overall elderly population. 

Recent estimates from the Department of Statistics Malaysia (DoSM) indicate a rise in the composition of individuals aged 65 and over, increasing from 7.2% in 2022 to 7.4% in 2023, encompassing approximately 2.5 million people. This shift underscores Malaysia’s experience of an ageing population. 

Furthermore, DoSM projects that by 2040, Malaysia’s demographic landscape will witness a nearly equal distribution between the young (18.6%) and the older population (14.5%). The elderly demographic is anticipated to surpass six million, marking a transition for Malaysia into an aged society. 

Several factors contribute to this transformative shift in population dynamics, including changing fertility rates, increasing life expectancy, international migration, and shifts in industry structure. 

Declining Fertility Rates 

EMIR Research, a think-tank body supported this observation. In a report published in September, they reported that a substantial decline in the fertility rate has been observed in recent years. 

“According to the data from the World Bank, the latest reported data on the fertility rate for Malaysia in 2021 is 1.8 births per woman — a substantial decrease from 6.4 births per woman in 1960, accompanied by a steady increase in life expectancy among Malaysians,” said the report. 

According to the 2012 World Bank statistics, 26.62% of the population were under the age of 15, which is approximately 7.89 million people aged 0-14 years old. 15- to 64-year-old people made up 68.01% of the population, which translates to about 20.13 million people. 

The relevant age for this topic is elderly people aged 65 and over, in 2012 made up about 5.37% of the population. This is about 1.6 million people out of the population of Malaysia. 

However, as the population and life expectancy have increased over the years, the percentage of those entering senior age has also increased consistently. In 2017, the elderly population was 6.29% of the country’s population, which is about two million senior citizens. 

In 2022, the population is about 33.87 million with elderly citizens making up about 7.5% of the country. This translates to about 2.54 million seniors. 

As seen, the increase of seniors from 2012 to 2017 is 418,000 while the increase of seniors from 2017 to 2022 is 530,000. This increase is about 26.79% which displays a constant increase as the years pass by. 

Thus, it is self-evident that as the years pass by and life expectancy increases, more and more of the population will enter the elderly demographic and stay there, while the fertility rate decreases over time. 

Referring back to the statistics from the World Bank, it is also shown that from 2012 the percentage of under 15 has gone from 26.62% down to 24.34% in 2017 and finally 22.67% in 2022. This is a decrease from 7.78 million to 7.67 million people. 

Grandparents may help with teaching their grandchildren life skills that they may not be taught at school such as cooking or repairing cars and appliances (pic: Bloomberg)

This is most likely due to the decrease in fertility rates in the country in conjunction with the earlier-mentioned increase in lifespan for the elderly. This is also mentioned by the United Nations (UN). 

According to the UN’s World Population Ageing 2020 highlights, there have been substantial increase in life expectancy since the 1950s. This is due to advancements in technology and medicine, such as air conditioning, car safety features, pacemakers, as well as vaccines. 

These advancements allowed the lifespan in many ages to increase by entire decades, and as this technology spread to other parts of the world such as Malaysia, we too saw increases in life expectancy. 

In tandem with these two main factors, it seems the age demographic of senior citizens may continue to increase year-by-year, while the younger generation will shrink. In fact, the document predicts that the 727 million seniors worldwide will double by 2050. 

Hence, working-age adults will also be affected. Thus, with fewer workers and higher retirement-aged seniors, the costs to support them will increase. 

The increasingly elderly population also requires more medical attention than a healthy younger person. 

Therefore, the economic impact of an increasingly elderly society in Malaysia means that we must also be more adaptable to this change and adopt more public programmes that can help assist the elderly.

This can be from a financial perspective since there are many seniors who currently experience poverty. According to UPM’s Malaysian Research Institute on Ageing, the 2019 Household Income and Expenditure Survey of 5,197 senior citizens carried out showed about 31.2% of them were from poor households. 

This is a concerning statistic since the 2022 national poverty income line is RM2,589 or less a month while a monthly income of RM1,198 or less constitutes hardcore poverty. Especially when many elderly people have high medical costs to pay for. 

This slots in perfectly since the financial troubles they face often overlap with medical expenses. Either lack of medical access within the community or lack of money to pay for the said access to medical help. Diabetes, Cancer and many other non-communicable diseases (NCDs), plague many elderly people and it often requires a lot of financial help just to stave them off. 

Raising Retirement Age 

EMIR Research in its September report also suggested tackling challenges from an ageing population, Malaysia could consider automatic adjustment of retirement age with increasing life expectancy (this mechanism has been implemented in Denmark, the Netherlands, Portugal and Finland). 

They believe Malaysia could consider the World Bank’s suggestion of a gradual increase in the retirement age from 60 to 65 over ten years, allowing the public sufficient time to adapt to the changes. 

According to the Economic and Monetary Review 2022 reported by BNM, it stated that one of the urgent policy gaps is the issue of insufficient savings for post-retirement life. 

“The retirement age in Malaysia currently stands at 60 years old, while the minimum age for EPF savings withdrawal is 55 years old. To discourage early retirement, the government could consider amending EPF regulations to allow fund withdrawals only at the age of 60 or older, with exceptions for exceptional cases subject to individual assessments. 

“Furthermore, retirees should have withdrawal limits to prevent lump sum withdrawals,” they said, saying allowing such withdrawals has led to many elderly Malaysians, often early retirees at 55, spending their entire EPF savings within a few years. 

Therefore, it is highly up to the government and individuals to care for an ever-increasing senior citizen demographic. Despite the higher medical and living costs it takes to sustain them, it can also bring some benefits. 

Life expectancy has increased due to medicine and technological advancements, such as air conditioning, car safety features, pacemakers, as well as vaccines

One of the benefits of caring for an increasingly elderly society is that it helps out the other age demographics as well. For the middle-aged population with children, the elderly can help care for them while the parents are out working to help take some burden off their shoulders. 

For example, if a parent cannot attend to a child’s needs at the moment, the grandparents are able to help out with tasks such as cooking meals or driving the teenagers to social occasions. This helps ease the burden of working-class adults who may have other needs to tend to. 

This also doubles up as another benefit for the shrinking under-15 population in Malaysia. When their parents are out working, the youths are taken care of by their grandparents. They can impart wisdom and help with general life advice. 

Furthermore, this helps the generations bond with one another. Grandparents may help with teaching their grandchildren life skills that they may not be taught at school such as cooking or repairing cars and appliances. 

With this in mind, it will also help an intergenerational bond between grandparents and grandchildren. 

Overall, there are many negative effects to an increasingly ageing Malaysian society. Their financial burdens, as well as medical problems are often what makes their children put them in elderly homes. 

However, it is a net benefit that they can provide to us all whether young or middle-aged. However, the benefits only come with the inclusion of the government’s assistance as well as efforts at the individual level. 

There are millions of seniors in Malaysia and many of them could use a helping hand in their golden years. Ignoring them will only negatively affect us and make the longer lifespan more of a curse than an advantage. We must all play our part in accommodating the increasing senior population. 

• This article first appeared in The Malaysian Reserve weekly print edition