Preprint Article Version 1 This version is not peer-reviewed

Optimal Path for Sustainable Retirement System in Malaysia

Version 1 : Received: 6 August 2018 / Approved: 10 August 2018 / Online: 10 August 2018 (13:03:40 CEST)

How to cite: Ying Run, S.; Kilicman, A. Optimal Path for Sustainable Retirement System in Malaysia. Preprints 2018, 2018080205 (doi: 10.20944/preprints201808.0205.v1). Ying Run, S.; Kilicman, A. Optimal Path for Sustainable Retirement System in Malaysia. Preprints 2018, 2018080205 (doi: 10.20944/preprints201808.0205.v1).

Abstract

This research aims to analyse the sustainability of retirement system and relevant optimal path to achieve sustainable post-retirement livings in Malaysia context. Focus of this study is put on Employees Provident Fund (EPF) which is mainly constituted by employees from private sector. EPF is a fully funded defined-contribution by both employees and employers. In this research, main variables used are contribution rate and retirement age based on relevant indexation of pension. For a sustainable retirement living, retirement benefits are expected to be in a maximisation function. Attempts to find sustainable retirement fund are via step-by-step mathematical calculation using formulas in Microsoft Excel and verification of the result with Excel Solver via Generalised Reduced Gradient (GRG) algorithm. Eventually, two-third retirement decision model is used to justify the sustainability of retirement fund other than justification using monthly household expenditure.

Subject Areas

Sustainable; defined-contribution; optimisation; present value; future value

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