Retiring in comfort...

There is a significant duration of my absence on this blog, so to my followers, my humble apologies for not updating for so long.

The past few days, I have been reviewing my clients investment, especially my long time, regular clients who had stuck with me through thick and thin and obedient enough to invest in unit trust once every quarterly, and I am proud to say that most of them are getting quite good returns by doing so.

However sad to say I do not have that many clients who are investing their cash money via DDI or Direct Debit Investment which means we deduct a certain sum(say RM100) from your bank account every month for the purpose of doing a cash investment view additional savings for retirement.

Based on a survey that was published in Berita Harian, New Straits Times and a few other newspapers, an average Malaysian will spend all his/her EPF monies supposedly for retirement purpose, in just two to three years upon withdrawing their EPF monies. And I have witnessed that fact for real as I watched several of my clients who sadly depleted their EPF funds upon retirement within the mentioned time.

Without money, how do we go on with the remainder lifes? Where do you get the money from, every month, in order to maintain and to retain the previous lifestyle? Many people who are stuck in these positions will either ask money from their children, hoping their children can give them some money (but are sorely disappointed when their children cannot do so as their children too, have other commitments by then) or they are forced to go back to work. As a security guard, a taxi driver or something...

I firmly believe that a proper pre-retirement financial plan has to be made for those who aren’t in a government sponsored pension program where you can still derive and enjoy pension upon retirement. Even then, please remember that the pension paid to you is only half of what you are making at present time and by then say, 20 years from now, life will be so much more expensive then it is now, due to the ever rising inflation!!!

It’s always a good idea that as long as you work, no matter how old you are. Now is the time to start financial plan. The younger you are, the better. But, just in case that you only realize this when you get older, it is still a good thing. Better late than never.

I have some useful tips to share with you …

1) Register with EPF on the very first day of your working day. However, after taking into account of the cost of inflation, the contribution alone may not enough to sustain the entire retirement period. Therefore, it is always good idea to create your own retirement plan by putting aside at least some, say, 10% of consumable income for later use.

2) Increase personal saving as you getting old. If your start working at the age of 25 with 10% saving and decided to increase 1% every year, by reaching 35, you will save 20% of the income for retirement plan.

3) Put aside some of your annual bonus for retirement plan. Apart from that, you may have to revise retirement plan every year, to ensure that the money flow is enough and, to adhere to the original plan.