Retirement Planning

Real life begins after retirement! Make the second half of your life your best journey

Do you ever ponder on the following questions :

  • How much money do I need to prepare for my retirement ?
  • Can I afford to retire early ?
  • Are my savings and EPF sufficient to support my retirement ?
  • How can I have a meaningful retirement life ?
  • What if an illness strikes, am I prepared ?

If any of these questions make sense to you, working on your retirement plan is a good idea.

Either you plan to enjoy your retirement or you will retire from enjoyment.
~ Author unknown ~
As all of us grow old and retire, we shall need to use our nest egg to support us through old age.
If a Malaysian employee retires at 60 years old, and then lives till 85 years old, the retiree would need money to see through another 25 years of post-work years.
If a certain life-style is envisaged during retirement, a sum of money is certainly needed that will last at least for as long as the retiree lives.

2 phases during retirement

During the first ten years into retirement, many retirees are still in an active phase. There can much travelling to see the world, play golf and tennis with friends, and much social activities.

The real slowing down starts if ill-health gets in the way or through the natural aging process. Generally, say from mid-seventies and above, the body is more susceptible to diseases. More money will be spent on medicine, doctor and hospital bills to sustain health.

When to plan for retirement?

For the working adult, the answer has to be right away. In fact there is much advantage to plan for retirement whilst young as it requires less money for the power of compounding to ensure your money grows if you have invested the money wisely.

If you were in your 50s and you now start to plan for retirement, you will need to be more conservative in your investments because you do not have time to re-earn the money should you lose part of it during a market slump.

Have your considered these important factors?

How much is needed for retirement?

This really depends very much on the life-style that you plan during retirement. If you basically wish to maintain the kind of life style that you have enjoyed during your pre-retirement years, and if your family is independent of you, then it is possible that you can discount the living expenses to perhaps 75% or less of your pre-retirement income.


Is your EPF sufficient to last your retirement

It is estimated that 70-80% of working adult employees are participating in the compulsory savings scheme via the Employee Provident Fund which requires the employee to contribute 11% and the employer 12%.

If the money had not been used by the beneficiary, there should be a substantial sum upon retirement since the recent years EPF has been provided dividend payments around 6-7%.

Nevertheless, these are the questions need to find answer before rest yourself comfortably on the sofa.

  • How much is your current EPF savings ?
  • How much do you think you have at age 55?
  • Do you plan to make any withdrawal ?
  • How long do you think your EPF can last?
  • Can you guarantee your contribution to EPF?
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