Cover image via Nabila Adlina Azahari/New Straits Times
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Weak retirement savings among Malaysians may not just affect future retirees; they could also intensify the financial strain already faced by the sandwich generation, according to warnings from experts
Speaking at the Forum Ekonomi Malaysia (FEM) 2026 last Thursday, Retirement Fund Inc (KWAP) chief strategy and services officer Nazaiful Affendi Zainal Abidin said inadequate retirement savings could increasingly push retirees to rely on family members for financial support, a model he warned is becoming harder to sustain.
Nazaiful noted that about half of the Employees Provident Fund (EPF) members have less than RM50,000 in their retirement savings, an amount that translates to only around RM210 a month if stretched over 20 years.
"So, if the current system cannot sustain your life after retiring, then you have to depend on your family to support you," he warned.
However, a financial planner SAYS spoke to added that this is no longer a theoretical risk; it is already the norm for many Malaysian families.
"It is extremely common in Malaysia. In fact, in my professional experience, I would say it is the norm rather than the exception," said Dr Rajendaran Vairavan, describing how adult children frequently provide financial support to retired parents.
The financial planner told SAYS that many retirees today either "have insufficient EPF savings", "have withdrawn too much during their working years", or "did not formally plan for retirement at all"
As a result, adult children, especially those in their 30s and 40s, frequently provide ongoing financial support, according to Rajendaran.
He added that this ranges "from small monthly allowances to fully covering living expenses".
While filial responsibility remains strong across Malaysian families, Rajendaran said the nature of that support has shifted.
"Culturally, filial responsibility remains strong in Malaysia across Chinese, Malay, and Indian families. However, what used to be 'voluntary support' is increasingly becoming 'financial necessity'," he said.
Rajendaran also noted that the financial strain associated with being part of the sandwich generation is now being felt much earlier in life
"Previously, financial strain tended to peak in the mid-40s or early 50s. Today, I am seeing pressure begin as early as the early 30s," he said.
He attributed this to a combination of "rising cost of living (housing, childcare, education, healthcare)", "parents living longer due to better healthcare", and "inadequate retirement savings among the previous generation".
"Many young professionals are simultaneously servicing housing loans, raising young children, and supporting ageing parents," he said.
"This compresses their wealth accumulation window and delays their own retirement planning."
"If not managed carefully, the sandwich generation risks becoming the next underfunded retirement group."
According to Rajendaran, when retirement savings fall short, support from children typically comes in several forms
"From my experience, support typically falls into four main categories," he said, identifying them as monthly cash allowance, medical expenses, housing support, and debt settlement.
He added that medical costs are often the most disruptive.
"Medical costs are particularly high. A single major illness can significantly disrupt the financial stability of the entire family."
This concern echoes Nazaiful's broader warning about sustainability. He said relying on family support is increasingly unrealistic as households become smaller and living costs continue to rise.
"And we all know for a fact, as the country progresses, the family unit becomes smaller, and there's also the case of cost of living getting higher, and this often mentioned mantra of 'sandwich generation', so you are stuck between a rock and a hard place. So, that also is not sustainable," Nazaiful said during the forum.
The financial planner said that depending on children as a primary retirement strategy is becoming increasingly risky
"In my professional opinion, relying on children as a primary retirement strategy is increasingly risky," he said, pointing to smaller family sizes, higher property prices, greater job market uncertainty, and slower real income growth among younger generations.
"While family support may still be part of the equation culturally, it should not be the foundation of retirement planning," he added.
Instead, he said retirement planning should be built around personal savings, diversified investments, and medical coverage, warning that "depending fully on children creates intergenerational financial strain".
For working adults already supporting ageing parents, Rajendaran stressed the importance of structured financial planning
"The key is structured financial planning rather than reactive support," he said, noting that many families struggle because support is provided on an ad-hoc basis.
According to him, it is important to avoid sacrificing long-term retirement savings entirely, warning of a repeating cycle.
"It is important to remember: If you do not secure your own retirement, you risk repeating the same cycle with your children," he said.
"Supporting parents is an act of love. But retirement planning must be sustainable across generations."
