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Can you retire with just RM900,000?

Can you retire with just RM900,000?  This was one of the keyword search which one of the reader to entered. How unusual. Is RM900,000 a lot of money after we have deducted the inflation depreciation to it? Assuming we are 56 today and tomorrow we retires, with RM900,000 in cash. Can we survive the remaining of our productive years? Let’s assume we live until 81 years old. That’s 25 years away. In months it is 25 x 12 = 300 months. RM900,000 divided by 300 months = RM3,000 per month. Assuming inflation is really low, at 2% per year. Based on simple calculation, your RM3,000 would be just RM1,500.  Suddenly it does not seem like a lot right? My mother would tell you it is enough for two persons. My father and she. Why would I agree with her? Well if you have the following done before you retire, then perhaps you are still safe.
Medical Insurance – Better be covered. This is a critical part to preserving your wealth. Imagine just one kidney stone operation every five years, that would have cost you easily 6% of your RM900,000. (RM10,000 per kidney operation). There are many more surgeries which costs many times higher.
Car Loan – Do not tell me that you are buying a new car when you retire? It’s not like you need the car to race against all your other retired friends right. Make sure you get a reliable car though and not one which requires huge maintenance even if it looks great outside and inside.
Housing Loan – Hopefully by the time you retire, you would have repaid your loan in full. Do not overburden yourself once you retire. It’s time to go enjoy etc. Perhaps at this time, REITs may be a better bet.
Credit Card – My father even called the bank to limit his credit limit because he would not be spending so much anyway. Pay them all within the same month. Manage it well. If you have outstanding balance today, maybe you are spending too much.
Luxury – Branded smartphones.  Do you need just a smartphone which can do everything you need or you need a smartphone that can make people feel you are successful? If you think this is just little, please be reminded that if you change your smartphone on a yearly basis, from Iphone 4 to 4S to 5S and most probably in a few months time, Iphone 6, you would have spent over 1% of your RM900,000 just within 4 years, on nothing more than just SMARTPHONE.
Holidays – One holiday every quarter is still possible if you go for one by yourself and the other three sponsored by your kids. Yes, I am serious. You should have kids! Teach them well and watch them grow to be great, just like you. My parents love China, that’s pretty okay as it’s cheap. Alternatively, they have no issues to buy Air Asia months ahead and save huge money. Imagine a holiday for two by flights to Kuching, together with stay at Tune Hotel for 2 nights for just RM116.  I am not joking, I have done it before. 🙂
Think about it. What’s needed, what’s wanted. Manage your needs, Control your wants. Yes, I think I will manage based on my mother’s way and I think I may just survive the next 25 years after retirement with RM900,000. Now for the hard part, how to get to RM900,000 before I retire. Oh yeah, EPF helps a bit too.
written on 5 June 2014
Next suggested article:  Secure and protect your wealth – Part 1

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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0 Responses

  1. I believe there are tons of people who can retire on RM900k. There are also some people who cannot live with just RM900k income. In other words, you have the choice to determine what you want in life.

  2. Alternatively, you can stay half retire with minimal income from a job especially doing something you are really passionate instead of counting on 900k that may run out eventually : )

  3. Important is how to manage the money than how much a person have.
    With well manage, the money even little will grow up. With poor manage, no matter how much money have, it will end up with nothing.
    Strongly agree with Charles article especially on luxury phone and credit card topic.
    A person, our friends who non stop changing new latest model phone, don’t be admire them. They keep update with new phone, in other word, saving definitely with little or no. I have this kind of friends who even worst will perli me using not latest model phone and show off their latest new phone. I just smile, no comment to them and we see later what it happen when we retire.
    Nowadays I notice that people that pay minimum payment for credit card getting increasing. Most basic on manage our money is pay full amount on credit card. With minimum payment, yes, we have extra money to spend. But that is no different than borrow money from bank because need pay interest for outstanding. Some people ask me which bank offer low outstanding interest and when I answer I don’t know as I pay full payment. I get a feedback before from a friend pay full payment is stupid action. Again, I just smile and the side effect you can see later on after few years.
    The way that we manage money today, reflect future retirement ^^

  4. Charles, agreed with what you have laid out here. However, you forgot to include the medical insurance premium into your equation.
    I believe the medical insurance premium needs to be paid every year or even monthly after retirement, so, the RM 1,500 available monthly “living allowance” need to be further reduced by the medical insurance premium, and, boy, they’re not cheap ?
    Having said that, I believe whatever left behind still sufficient for a decent retirement live. But, big question is, are you looking forward for this mere mediocre very simple retirement live ? I know I wouldn’t, so, have to work harder, to save more $$$$

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