MONEY THOUGHTS: Life is like a piece of string

I HAVE had a series of conversations recently revolving around the need for Malaysians to act rationally in light of two major demographic trends:

1. We are living longer, on average; and

2. We are having fewer babies.

Taken together, those population megatrends mean one thing: Malaysia must push up its official retirement age from the current 60 years of age.

Facing up to this truth is painful because most people in most countries resent being told by the powers that be that they must work longer before they qualify to start receiving their retirement nest egg or pension proceeds.

Malaysia, however, is in a fascinating position because more than 90 per cent of our roughly 17 million-strong work force does not qualify to eventually receive a government (or public) pension.

More than 15.3 million workers in Malaysian workplaces need to exercise personal responsibility to build their own nest egg or fund their own private pensions.

Which brings us to the rather odd title of today's Money Thoughts column.

You are entitled to wonder why I maintain that "life is like a piece of string".

You should also be asking, in what way? If you reckon my odd title is reminiscent of a famous line in a classic Tom Hanks movie, you would be spot on!

More than 30 years ago, Hanks won his second Best Actor Academy Award (or Oscar) in March 1995 honouring 1994 performances for his eponymous role in that year's Best Picture Forrest Gump.

At the start of the movie is this famous line: "Life was like a box of chocolates," although it is more often than not misquoted as "Life is like...".

WORKING LONGER NOT SHORTER

The reason I often use the simile "life is like a piece of string" is that it makes it very easy for me to explain to consulting clients and conference audiences the massive advantages of working longer rather than shorter.

In case you are wondering, here is how my explanation usually goes:

1. Even though only God knows how long we have to live, it is still very easy to think of our life as a piece of string of indeterminate length;

2. The first portion of the string represents our life from birth through to all phases of schooling until graduation;

3. Then our working decades are represented by the second or middle portion of our life-string; and finally

4. We cease working for active income and live out our retirement years or, more likely, our retirement decades.

Because human lifespans are generally lengthening in most countries, it is not surprising that national retirement ages are also wafting upward.

At the same time — and here comes the rub — human fertility rates are also falling at a precipitous rate.

It was about 3.3 in 1990. The way to interpret that number is easy: All women of childbearing age back then were projected to have an average 3.3 children throughout their lives.

Today that vital human metric is down to 2.2. And it is getting worse.

According to the most robust United Nations projections, humanity's aggregate fertility rate will either fall to 2.1 or possibly dip below that in 2050.

Note: The "point one" that follows the "2" you just read in the paragraph above takes into account infant mortality plus the consistently higher ratio of about 105 baby boys to baby girls.

What is worrisome for our country is Malaysia's overall fertility rate has been below 2.1 since 2013, and had fallen to about 1.6 in 2024. It continues to dip.

These demographic changes make it clear that for the Malaysian economy to continue to thrive as an integral part of the interconnected global economy, better STEM (science, technology, engineering and mathematics) trained, more linguistically qualified older workers must continue playing a viable role in the evolving workplace of the 2020s to 2050s.

RETIREMENT-FUNDING YEARS

Several years ago, I spent a long time mulling over these developing megatrends.

I then jotted down some simple projections.

Based on those, I estimated that Malaysia needs to see its official retirement age moved up in stages to 65 by 2035 and to 70 by 2050 if the country is to avoid the sad state of having a massive mismatch between needed high-paying technical jobs that will form the bedrock of our future industrialisation and the skilled workers required to fill them.

First, that is true from the perspective of the overall national economy. Second, what about from the angle of our respective personal economies? The solution is actually staring at us in the face.

If we arrange our affairs and extend the second "middle" portion of our life-string by continuing to work for money, doing so lengthens our retirement-funding years.

Then, since each of our life-strings is an unknown yet fixed length, the longer we extend the middle bit, the shorter we need to fund the final retirement third.

It is logical to wake up to the cold hard truth that too many older people already face overly long underfunded retirements.

So, think about adjusting the segments of your own planned life-string to generate for yourself the increased lifetime income you crave.

© 2026 Rajen Devadason

Rajen Devadason, CFP, is a Securities Commission-licensed financial planner, professional speaker and author. Read his free articles at www.FreeCoolArticles.com; connect with him on LinkedIn at www.linkedin.com/in/rajendevadason, or via rajen@RajenDevadason.com. You may also follow him on Twitter @Rajen Devadason and on YouTube (Rajen Devadason).