Yeah Kim Leng of Sunway University Business School said it was alarming that so many Malaysians were in this situation.
“What we need is a policy measure to see how that number can be reduced,” he told FMT.
“I think the government should put more resources into enacting a special social security net, especially for those who are not in the formal sectors.”
He voiced concern that without any action on the part of the government, those who retired with insufficient savings could find themselves in financial trouble.
He also suggested that courses on financial literacy be taught at universities or in training courses designed by human resources departments to help create a more financially educated and independent society.
Earlier this week, Employees Provident Fund (EPF) chairman Samsudin Osman revealed that 62% of some 22 million working-age Malaysians are self-employed and not covered by any formal social protection.
He also said recent statistics indicated that more than 70% of Malaysians do not have a rainy day fund for emergency expenses.
“It is a sad fact that many Malaysians do not have enough savings for retirement. As a social protection agency, this is of great concern to us,” he said.
He added that at 36%, Malaysia was behind countries such as Singapore and Taiwan in terms of financial literacy.
Economist Barjoyai Bardai meanwhile offered a different solution which he said would require only minimal investment from the government.
“What we need is a comprehensive programme to protect against causalities,” he told FMT.
“I believe (investing in) insurance is much better than EPF as EPF is just savings that can only be withdrawn during difficult times.
“To me, insurance groups or group takaful works better as this only needs minimal investments.
“This should be a nationwide programme as it would collect investments from the people, not the government, which makes it cheaper.”
Social security protection in Malaysia is mainly provided by the Social Security Organisation while the EPF serves retirees.
EPF: 62% of self-employed Malaysians without social protection