Retirement is an important reality that everyone will eventually face. Most of the young people does not think that retirement is close to them, whereby it is a far-long ways to come. A lot of us are thinking that I still have time to do my retirement plan in the future, perhaps in the next five years more, or ten.

Especially in Malaysia, most of the salary-based employee thinks that retirement is none of my business. The Employee Provident Fund (EPF, a.k.a. KWSP) has prepared for them to enjoy retirement.

If you are aware of the increment of retirement age from 55 year-old to 58 year-old in 2008. The retirement age increment further announced on 2012 to 60 year-old. This phenomenon has been dramatically debated in the community as the retirement is not a way to go as most of the employees are not ready to retire in terms of family financial constraint especially if the employee is the sole breadwinner of the family.

Have you ever think of, retire as you want to, not as your bank account says so. Below are the TOP 5 reasons why you need to start your retirement planning when you are young.

  1. Debts Cancellation
    If you just count on your EPF withdrawal after your retirement to support your next 30 – 40 years, then you are rest assured end-up with insufficient fund to continue your living. Statistics have proved that most of the retiree spend all their EPF within 3 years (The Star Online, 2016), whereby some of them may drained their EPF saving within 30 days to pay off their debts.
  2. Nuclear family
    The olden days of big family with offsprings to support their living at older age has gone. Especially the current ASEAN family structure come with only 1 or 2 offsprings to form the nuclear family required self-sustainable financial culture to enable them for retirement plan. It is a vital consideration to plan for retirement without depending on family support.
  3. Inflation
    Inflation is inevitable facts that one will faced. Do consider in the inflation when you do your retirement planning. For a heads up, to support your current lifestyle (i.e. RM 3000 a month for a comfort living), you may need to prepare of at least RM 6000 a month to sustain the SIMILAR lifestyle in the next 10-year time.
  4. Start Early
    The earlier you start the retirement plan saving in your life, the more you are going to have when comes to retirement. Adversely, the more procrastinate in your retirement plan, the more you need to contribute in later stage to attain the same level of comfortless after retirement.
  5. Family Emergencies
    As you aged, there are higher chances to be experienced more health problems. You do not want your savings drained into paying expensive medical expenses after retired. Without a proper retirement plan by including all the potential medical emergencies and family emergencies, you will experienced a tough moment to liquidate your assets in order to support you during the critical moment.

Having understanding all the potential reasons but not limited to the above, you are encouraged to have serious thoughts of you future, if not your family. Doing something for yourself while you still have the earning ability before drive yourself into regrets later on.

What should I do next?

First, you need to clear your mind on these three important aspects:-

  1. When do I want to retire? In the next 20 years, 30 years?
  2. How many dependents I have? Or Debts?
  3. What kind of lifestyle I want to live on after retirement?
  4. How much do I need to live and support the lifestyle I want?

Then use the following calculator

https://www.greateasternlife.com/my/en/personal-insurance/understand-insurance/financial-tools-to-know-what-you-need/retirement.html

Still confuse? Consult our financial consultant specialist

Investing, like it should be…

References

The Star Online. (2016, December 28). Retrieved from EPF: Some retirees spending all their withdrawals in 30 days: https://www.thestar.com.my/news/nation/2016/12/28/epf-some-retirees-spending-all-their-withdrawals-in-30-days/