Retirement Planning Malaysia

Do you spend more money during holidays or on workdays?

To majority of people, Retirement is holiday. It is a holiday everyday and therefore will spend more money while having reduced or no income.

Will you be ready for this holiday? This holiday may last on average of 20 years or more.

Facts/statistics quoted by industry players on retirement planning in Malaysia:
Retirement Facts in Malaysia

• 34% Malaysians put aside money regularly for their retirement funds (may or may not include EPF contributors)
• 99.9% of EPF contributors withdraw their savings in one lump sum
• 70% of these would use up their EPF savings within 3 years
• 72% Malaysians claim that they save for retirement
• 41% do not have concrete plans to build their retirement fund
• Of those who save for retirement, 77% put their money in low-yielding savings vehicle
• Most do not segregate their retirement savings from other savings
• Those who do, 83% would use the money should other needs arise
• 73% do not seek advice from financial professionals
• 39% intend to work beyond retirement age to boost income

What have you done? What have you not yet do? Will your Retirement Holidays be a golden holidays or miserable?

Inflation - Stranger or Foe?

I suppose many of you are able to define or explain the word "Inflation". If you lookup this word in the internet or books, you will be blown away by the many creative definitions.

In my opinion, the simplest definition of Inflation is "time taken for the value of your money to halve", i.e. time required for your RM10 (example) to halve or the time required for prices to double (example - a bowl of RM5 noodle to double in price)

What is your inflation?

Yeah, I supppose the numbers you plucked from the papers are not exactly incorrect but neither are they correct (depends whether you believe the reports). There are however more than one category of inflation:

1. Country's Inflation
2. Personal/Individual Inflation

One common formula of calculating inflation is Rule of 72. For instance, if we assume the inflation rate to be 4%, then 72/4 is 18 - it will take 18 years for the value of your money to halve or 18 years for price of items to double.

However as wise consumers, we are all aware that this is not true. How much was a bowl of noodles 5 years ago? 3 years ago? 1 year ago? So can our country's inflation possibly be 4% and below?

Personal Inflation

There is another inflation that many of us are not aware of - Personal Inflation.  Do you budget or itemize your expenses? If you do, try analysing it. How much did you spend (in general) in 2008? How much in 2009? From there you will be able to ascertain your inflation rate. Of course, if you wish, you can proceed into details - expenses by categories. You can then have an inflation rate for every category of expense. 

What this means is that your personal inflation rate is as important if not more important than our country's inflation. Thus, it is vital that you need to keep an eye on your expenses and income.

Did you just give me a number? Where did you get the number from? Did you get it from the papers or reports?

Calculating EPF

The Malaysian EPF was founded after the enactment of Employees Provident Fund Act 1991 (Act 452). EPF was created to help employees from both private and non-pensionable public sector save a portion of their salary.

EPF primarily applies to retirement, sickness, disabilities or unemployment. It is unfortunate that EPF is now accessible for many other reasons too. How much do you think one will have @ age 55 if the fund is used all the time?

Do you know how much you will have in your EPF by age 55?

Click on this link to find out --> EPF Calculator

Retirement - Baby's Thoughts

I repeat my question -

1. When is the Best time to plan for your retirement?
2. Do you have all the time in the world?
3. Do you know that time and compound interest is an ally?

 
 
 
 
 

For asisstance, contact us at gloriouscash@live.com

Top 5 Unexpected Costs of Retirement

Some people see retirement as a chance to sit back and relax, while others take advantage of their newfound time by traveling the globe. Either way you spin it, retirement costs money. As long as you are breathing, you will incur... costs -- and some of your bills will be unexpected.
Here are the top five expenses that aren't always factored into a retirement budget or investment plan. The good news? Almost all are related to a positive trend: people are living longer, healthier lives.

1. Living Longer

   (Happy 100th Birthday!)

2. Adult Children With Money Problems

   (Your empty nest may not stay that way)

3. Higher Taxes, Higher Inflation

   (Pay it out to LHDN. Taxes are one of the two things you cannot escape in life)

4. Health Costs and Dental Care

   (Expect to pay for a happy, healthy you)

5. Repairs for Your Older Home

    (It’s Tool Time!)See more

Create your Personal "EPF"

Not sure how much money to put aside for your retirement? Start a personal retirement fund. Social Security (EPF) was originally designed to get you through your retirement years but it’s unclear whether it will be sufficient due to the many “leaks”. While you can't stop paying EPF from you...r paycheck, you can create your own additional fund for yourself using the same percentages.

Creating your personal retirement fund is just one way to provide income in retirement. Consider all your options. Consider working towards being debt-free as part of your retirement planning, as well. Don't forget to discuss retirement planning with your spouse. A worry-free retirement is the result of solid planning and reviewing all options.
 

RETIREMENT? Ask the Experts!

What is RETIREMENT to you? No idea? Let's consult the experts!


Kids say the funniest things—but sometimes, they're smarter than we think. Hear their thoughts on retirement, and find out if you're on track.
 
http://www.youtube.com/watch?v=Q3dYEIgB0c4

RETIREMENT WOES

RETIREMENT is a word commonly heard but few people understand the predicaments of retirement.


What is retirement to you? Do you realise that in retirement, everyday is a holiday?

Where is your source of retirement income? What happens if you run out of $$$ ?

http://thestar.com.my/news/story.asp?file=/2010/5/2/nation/6172579&sec=nation
 

Full Time Job

RETIREMENT is a FULL TIME JOB and you are the BOSS.

Can you afford to pay yourself?