Updated: Nov 24, 2018
Most of us dream of a happy retirement, where we can wake up looking forward to life. Spending time with our loved ones as we grow old, instead of waking up worrying about bills and making ends meet. However, when should you start planning for your retirement? And what if that retirement plan turns to become a nightmare?
Assuming that you had a great career and you managed to provide a good life for your family, how can you ensure that the standard of lifestyle can be sustained and not downgraded? Here is a question to ponder, if you ever stop working tomorrow can your savings help you sustain your lifestyle for the next 20-30 years?
If your retirement fund can sustain, CONGRATULATIONS as you have planned well and you are a savvy investor who knows how to manage your money well. If it’s not enough, then you are not alone in this plight.
Common Practices that could go Wrong.
There is an alarming trend for adults as they find themselves unable to retire. Almost nine out of ten retirees said that they are worried that they are not able to retire even past the age of 60. This is because most people started planning for their retirement too late, and sometimes relying only on one source to do the job.
The Employee Provident Fund (EPF) reported only 18% of Malaysian have 197,000 to 228,000 and more. And assuming that if a monthly expenses would be RM2500 per month by the time they retire, the EPF fund would only last for 7 years. Lets not forget inflation and the value depreciation of money as time passes.
Our life expectancy has rise up to 75 years old on average. And as morbid as it sounds, most cancers happen after the age of 60 and this may cause also unnecessary expenses.
The Ministry of Health (MOH) Malaysia reported that the common age of breast cancer is at the age of 50-59 and testicular cancer happens to men about the age of 60 onwards which is also around our retirement age.
That means that our retirement fund can go vanish into thin air overnight. Hence the need to update or revise your current medical insurance from time to time.
Many people rely on rental incomes as a second source to support their retirement life, but unexpected expenses would happen, such as major house maintenance and overhaul to an aging property. That few properties that you bought in your 30’s will be in dire need of maintenance fast forward 30 years later. Bursting pipes, burned electrical outlets, leaking rooftops, fading and mouldy paint job not to mention irresponsible tenants...etc, and the list adds up. You may no longer have the same physical strength to attend to these needs.
Here are some questions that can help you identify whether you are retirement proof to the future.
1) Do you have a current variable income?
2) If yes how much of the variable income are you reinvesting back into variable assets
and how much is diverted to guaranteed income assets that can give you your
peace of mind for your retirement planning?
3) How many guaranteed income do you have, that is able to help you to combat
against external factors such as inflation and lifestyle changes.
4) Does your retirement planning comes with some cushion for emergencies and
What if there is a way to get a guaranteed income of RM10,000 per month upon reaching your retirement to help support you and wouldn’t it be worthwhile to look for such options to secure your retirement and have you already planned such options?
At TLC we firmly believe that, this situation can be averted or cushioned if the right financial planning is in order. Contact us today, to understand more on retirement planning.
- Eugene Kok/ Editor Audrey