Among the mega trends shaping the 21st century are demographic and social change as the global population is projected to hit 10 billion by 2050.
Data also indicate that the world's population is ageing rapidly. The proportion of people aged 65 and above is expected to spike from nine per cent in 2019 to 13 per cent in 2030, and up to 16 per cent by 2050.
Globally, the demographic of those aged 65 and above is growing the fastest. In 2018, persons aged 65 and above outnumbered children below 5.
An ageing society is where seven per cent of the population is aged 65 or above, while a super-aged society is one where 20 per cent of people are in that age group.
Malaysia is in transition from an ageing to a super-aged society in the next 25 years, as the rate hit seven per cent in 2020 and is projected to double to 14 per cent in 2044 and 20 per cent by 2056.
Are Malaysians ready for this "Silver Tsunami"?
Our life expectancy has increased from 65 years in 1971 to 76.5 in 2021. However, that does not necessary mean we are living better and healthier.
Malaysia's healthy life expectancy was estimated at 66.6 in 2016. The gap with 2021's life expectancy is partly due to a rise of chronic non-communicable diseases, led by hypertension (37 per cent), high cholesterol (21 per cent) and diabetes (19 per cent).
Many now depend on public healthcare facilities. Few have adequate medical coverage from private health insurance or takaful. If this trend continues, we can expect an increase in public health expenditure in the future.
In addition, public financing for aged-care services is also critical. Traditionally, the care and support come from family members under the same roof.
These days, family structure has changed to a small family and intergenerational co-residence is uncommon. More social support is needed to take care of destitute older persons who have dementia or difficulties to perform their daily activities.
Old-age income support is another challenge. While the majority of the labour force is covered by retirement schemes such as the Employees Provident Fund (48.9 per cent), or Retirement Fund Inc (known by its Malay acronym KWAP) and Armed Forces Fund Board (known by its Malay acronym LTAT) (11.9 per cent), 39.2 per cent are uncovered.
Moreover, almost three quarters of EPF contributors will have an annuitised amount of less than RM1,050 monthly and over 40 per cent will have less than RM420 per month upon retirement, which means many may fall into extreme poverty.
EPF members with critically low savings have increased to 48 per cent, a 28 per cent increase prior to the pandemic, which changed the employment landscape towards a gig economy.
The growth of the self-employed and informal sector is expected to increase from 5.7 million people now, to 8.8 million in 2040.
Many women are uncovered by retirement schemes as they work in the informal sector, are self-employed or engage in unpaid work for the family. The majority of aged care workers are also women. For the formally employed, the gender wage gap resulted an average EPF account balance of RM177,000 for women, as compared to RM233,000 for men at age 54.
Women also tend to retire earlier. Data in 2016 reveal that only 17.9 per cent women are employed at the age of 60, while 59.7 per cent of men of the same age are.
With zero or low retirement savings plus longer life expectancy for women (78.3 years) as compared with men (73.2 years), women deserve special needs and social protection.
What is the best way to prepare ourselves as a super-aged society while aspiring to be a high-income nation? It calls for policies to support increasing demand for healthcare and old-age income support.
One way is to turn the Silver Tsunami into an opportunity for a Silver Eonomy. But, to achieve this, we need to promote a holistic and healthy ageing lifestyle with psycho-spiritual intervention.
To reduce the fiscal burden, we should strengthen the third sector economy. Zakat and Baitulmal institutions need to incorporate old age poverty into their future distribution policy.
In this respect, the initiative to build the Madinah Mawaddah Waqf City as a retirement village is worth mentioning.
The writer is a fellow at the Centre for Economics and Social Studies, Institute of Islamic Understanding Malaysia
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times