Financial Management, Retirement, and Mental Health in Malaysia: Promoting Well-being in the Golden Years

The relationship between financial management, retirement, and mental health in Malaysia is of utmost importance as individuals transition into their golden years. Effective financial planning and management during retirement play a significant role in shaping mental well-being. This article aims to provide statistical insights into the interplay between financial management, retirement, and mental health in Malaysia. By understanding the statistics, policymakers and individuals can take proactive steps to ensure financial security and promote mental well-being during the retirement phase.

Financial Stress and Retirement:

Financial stress during retirement can have a profound impact on mental health. The Employee Provident Fund’s (EPF) annual report for 2020 highlights that many Malaysians face challenges in saving enough for retirement, with only 24% of active contributors having achieved the recommended savings target. Financial stress resulting from inadequate retirement savings contributes to anxiety, depression, and a decreased sense of well-being among retirees.

Retirement Savings and Mental Health:

Insufficient retirement savings are a pressing concern for Malaysians. According to the Malaysian Department of Statistics, the median retirement savings among households aged 55 to 59 in 2019 was only RM50,000. This low level of savings can lead to financial anxiety and mental health issues during retirement.

The Impact of Retirement Planning:

Retirement planning significantly influences mental health outcomes. A study by Abu Bakar et al. (2019) revealed that individuals who engaged in comprehensive retirement planning reported higher levels of well-being and lower levels of psychological distress. Planning for retirement provides a sense of control, reduces financial stress, and promotes mental well-being among retirees.

Healthcare Costs in Retirement:

Managing healthcare costs is crucial for retirees’ financial well-being and mental health. The EPF report highlighted that healthcare expenses pose a significant financial burden during retirement, with 47% of EPF members’ withdrawals being utilized for medical-related purposes. Inadequate financial planning for healthcare needs can lead to financial strain and anxiety among retirees.

Gender Disparities:

Gender disparities exist concerning financial management, retirement, and mental health in Malaysia. According to the EPF report, women tend to have lower retirement savings compared to men, partly due to career interruptions and lower incomes. This disparity can contribute to higher levels of financial stress and mental health challenges for women during retirement.

Promoting Financial Literacy and Mental Well-being:

Enhancing financial literacy and promoting mental well-being among pre-retirees and retirees is crucial. The EPF’s Financial Education and Social Services Department offers programs to improve financial literacy and retirement planning awareness. Initiatives such as these provide individuals with the knowledge and tools to make informed financial decisions, secure their retirement, and safeguard their mental well-being.

The statistics underscore the critical relationship between financial management, retirement, and mental health in Malaysia. Inadequate retirement savings, financial stress, and healthcare costs pose challenges that can impact mental well-being during the retirement phase. By prioritizing retirement planning, promoting financial literacy, and implementing policies that address gender disparities, individuals can take proactive steps to ensure financial security and foster mental well-being in their golden years. Through a combination of personal efforts, government support, and education, Malaysians can navigate retirement with confidence and enjoy a fulfilling and mentally healthy life.


Abu Bakar, N., Ahmad, Z., & Ibrahim, M. (2019). Retirement planning and well-being among Malaysian retirees. Journal of Financial Counseling and Planning, 30(1), 62-75.

Employee Provident Fund (EPF). (2020). Annual Report 2020. Retrieved from

Malaysian Department of Statistics. (2020). Malaysian Economic Indicators: Household Income & Basic Amenities Survey Report 2019. Retrieved from