Introduction

As the cost of living continues to rise in Malaysia and retirement savings remain a growing concern, many Malaysians are looking across the Causeway to Singapore for better job opportunities and financial security. Take the story of Gunavathi Chinasamy, a 29-year-old administrative executive in Singapore earning an impressive S$2,500-2,800 (approximately US$1,845-2,067) monthly. In contrast, her equivalent position in Malaysia would net her only around RM3,000 (US$668). The stark pay difference is pushing many towards Singapore.

Similarly, Lee Yen Nee, a 36-year-old economics researcher, echoes this sentiment, stating that a smaller paycheck in Malaysia would greatly limit her retirement options. "If I do decide to go back to Malaysia to retire, of course, working in Singapore -- my savings in Singapore will help. I may even be able to retire early," she explained, highlighting a common aspiration among many Malaysians.

Statistics on Emigration

Recent statistics show a dramatic surge in the number of Malaysians seeking employment in Singapore. Application rates have doubled during the December 2023–January 2024 period compared to the same timeframe a year earlier, according to recruitment agency ManpowerGroup Singapore. Notably, job postings have attracted 30% more Malaysian applicants in Q1 2024 than in 2023, revealing the growing trend.

Out of 1.86 million Malaysians who emigrated abroad by 2022, about 1.13 million have settled in Singapore, as reported by Malaysia's former human resources minister, V. Sivakumar. The appeal of Singapore's more robust retirement system plays a significant role, with American consulting firm Mercer ranking it the fifth-best globally, while Malaysia's pension system lagged at 32nd.

Retirement Savings Comparison

Both the Central Provident Fund (CPF) in Singapore and Malaysia's Employees' Provident Fund (EPF) offer competitive interest rates of more than 2%, surpassing standard savings accounts. However, a report by the Khazanah Research Institute reveals a troubling reality: over 90% of EPF members under 30 lack enough savings to meet the minimum retirement target of 240,000 ringgit.

"The EPF is not really sufficient," said Chin Shyong, a 39-year-old Malaysian working in Singapore who benefits from both systems. "That's why we still see, even after retirement age, a lot of Malaysians are still working."

Economic Factors

Beyond retirement considerations, various factors, including Singapore’s strong economy, higher salaries, and superior job prospects, are luring many Malaysians. A study conducted by the Malaysian government in 2022 found that two-thirds of Malaysians living and working in Singapore earn between S$1,500 and S$3,599 monthly, while 20% enjoy salaries ranging from S$3,600 to S$9,999.

In contrast, a recent survey showed that 65% of Malaysian workers earn between RM3,850-9,890 monthly, and 20% have salaries of RM3,850 or less. Slow wage growth has led to Malaysia having some of the lowest household savings rates for low and semi-skilled workers, as highlighted by the World Bank.

Conclusion

Mercer's Head of Retirement for Asia, Chen Rupeng, noted that pursuing job opportunities abroad is "a strategic move in enhancing their retirement readiness." As the labor landscape shifts, the journey for many Malaysians appears to be one aimed not only at strengthening their current financial standing but also securing a comfortable, stress-free retirement.

With higher salaries, better working conditions, and a more promising retirement system, the allure of Singapore remains strong for Malaysians eager to secure their future.