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Retirement thoughts? Getting ready is the key

Posted in Personal Finance, and Retirement Related

We often do not think about retirement until the time when we need to retire, whether or not we are ready. Some may even think that the employers would take care of us until we retire. Well, here’s an actual fact. We retire at 56 perhaps but Malaysians are set to live till 76 or older. In other words, there would be easily 20 years which we have to take care of ourselves. Our Employee Provident Fund (EPF) comes in handy at that time but by then, it’s either we have enough or we do not have enough. There’s no further contributions. How about some thoughts and actions that we could start doing today? When we are still needed by the employers, wanted by other companies and capable of climbing the corporate ladder further?

Start with INVESTMENT. Starting is quite easy. Choose a forced savings type and buy a wealth protection plan; insurance. These two would be sufficient for a while until you have saved enough for a bigger investment such as a property, a second property and so on. Without sufficient knowledge, unit trust is better than stocks directly. Fixed Deposit is good and should have enough to last you 6 months should you be out of job. Once we have started, our investment journey usually grows to include property, stocks and even some alternative type of investments. Starting is usually the hardest…

Supporting ourselves, not rely on anyone else.  When we retire, it’s best to have enough to support our lifestyle. Sometimes, we may fall sick and sometimes we may want to travel a bit. If we have children, they may love us a lot but do remember that they too must work hard to sustain their lives and some may also be struggling. We do not need to look very far, just look at what’s happening to some of the older folks in some advanced countries. In Hong Kong, the older folks have the highest suicide rates in the world. Thus, if we intend to help them (our children) and help ourselves, it’s best that we have enough to at least last us until the day we bid goodbye. If we have extra, then that’s best!

Lessen our monetary burden. Try to structure our debts in such a way that by the time we retire, we would have nothing to pay for monthly except for our insurance, perhaps. Mortgage payments are normally a huge one on a monthly basis, especially when we are no longer working. If this is not planned, it would mean an additional unnecessary pressure when we retire. It’s best to buy properties as early as possible. In fact we could even RENT when we retire. Selling that property or properties that we have and use the money for things we love plus rent a place or even stay with our children?

If we have been taking actions for our retirement, chances are there would be enough in our EPF to supplement what we already have. However, do note that for the majority in Malaysia, relying on just EPF is a mistake. There’s just not enough to last more than just a few years. Thus, EPF is last resort and not be treated as main source. Oh yeah, when retirement comes and we do not have enough money, we can blame the world but the one who has to live on is ourselves. Think and act, ok? Retirement should be a time when we could finally enjoy and do what we love to do, even the small things in life. Assuming we started working when we were 25 and retired at 56, we have worked over 30 years. Frankly, that’s more than enough. Some would say I want to do what I love to do. That’s great! Making sure we do not need to worry about the money part is the critical part. I am MANY more years away from retirement.

written on 26 April 2018

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