The Window to Personal Financial World: Retirement planning

Happy Chinese New Year. J

Everyone will be celebrating New Year annually. When New Year is approaching, it also indicates that we are one year older. No matter we like it or not, it is just a fact. Years past by until one point we will reach one stage which is known as retirement. At the retirement stage, I believe that most of the retirees have to depend on the savings or Employee Provident Fund (EPF) that they have. However, the question is the financial resources enough for them to spend at the retirement age?

Frankly, there are application software available in the internet that will help you to calculate the amount you need at the retirement age. You can find the application in Public Mutual website as well. I have seen that there are a lot of people trying to avoid calculating the amount for retirement because knowing the amount you need at retirement is very scary. You should remember that not much jobs are there for you to apply and sad to say that, you have to depend on yourself. Your kids might help you but they will have their financial worries as well. No doubt knowing the amount is very scary, that’s why you have to start doing your retirement planning as early as possible.

After working hard for the past 30 or even 40 years, you would prefer to have a more comfortable lifestyle. Maybe you would to prefer to do something that you have missed out during your young age. Doing community service? Reading? Travelling around? These activities will not generate any income for you yet you need to spend some money for these activities. How are you going to carry those activities if you even do not have enough financial resources for yourself?

Question might arise especially from those who are still far from retirement. To them, the financial resource should be used for buying car, property or even used for investment instead of retirement planning. However, the earlier you do your retirement planning, the better it is. I am not suggesting you put 100% of your financial resources into retirement planning but you should allocate a portion of it. How many percent you should allocate for retirement planning? It actually depends on you. Why there are a lot of financial planners encourage people to start retirement planning even when they are very young? When you are getting older, illness seems to become your best friends. No insurance company is willing to take the risk unless you are willing to pay more. I believe that many parents would not want to be another financial burden to their children. That is the main reason why many are urged to do retirement planning as early as possible.

Life Insurance Association of Malaysia (LIAM) president Ng Lian Lau had estimated that less than 5% are prepared for retirement. [1] According to him, those in 20s think that they are too young to think about retirement. When they are in 30s or 40s, they tend to believe they are doing enough because they have their EPF savings. For those in their 50s, they will feel that it is too late for them. If you are in the mentioned category age group, are you having the same thought?

We will usually regret after we face the problem. You will only regret when you do not have enough financial resource at your retirement age. To ensure that you will not be regretful at your retirement age, start doing your retirement planning now.