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Manulife Universal Saver

Build and optimise your wealth with Manulife Universal Saver, a universal life endowment plan to achieve your financial goals. Find out more

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Plan Early for a Comfortable Retirement

Just as ageing is inevitable, so is retirement for those with careers. To enjoy your retirement, it’s advisable that you plan for it from early on. Good planning can help you enjoy all that you want to do in your golden years.  

Happy Chinese Family

Many people look forward to their retirement to enjoy all the things they might have missed out on during their working years. Going on a holiday abroad, renovating their house or even settling all their outstanding loans could be among the items high on their priority list upon retirement.

Planning ahead is vital to ensure that your finances can provide for the comfortable retirement lifestyle as you hit the statutory retirement age of 60. Unfortunately, many 65-year-olds in the country, who make up 7% of the population, are struggling to maintain a minimum standard of living until the age of 77, which is the average lifespan of Malaysian men.

While those with pensions or Employees Provident Fund (EPF) savings may have something to fall back on, those without either of the aforementioned, are the ones who would be struggling the most to afford a comfortable life post-retirement. Even then, about 50% of those who contribute to EPF do not have enough savings to last for their remaining years, according to reports. Pensioners too will find their pensions fund being affected by the rising cost of living and inflation as the years go by.

 

Retirement planning is for all

Retirement planning is about preparing for life after the statutory retirement age. The focus on retirement planning usually centres around how to support yourself financially when you no longer have a salary. While having sufficient funds for basic necessities is a must, having a well-thought-out retirement plan also means you get to enjoy the extras such as going on holidays and other lifestyle choices.

Don’t fail to plan

Not planning for retirement can result in unfavourable consequences. If you’re still in good health, you may have to get a part-time job and work for as long as you can to continue paying your bills.

Additionally, as you age, there is an increase in the prevalence of ill health due to physical changes in the body. Having health insurance would greatly take off the burden of paying out of your own pocket. Remember, without any health insurance you may end up using all your savings to pay your medical bills.    

 

Start planning early

Almost all financial advice you can read online will state that the best time to start planning for your retirement is when you’re in your 20s or as soon as you start working. This is because, in your youth, you may think that all you need is some savings for retirement. But, as you mature, you may set targets for investment and asset accumulation, and when you eventually retire, you will reap the benefits of your smart retirement planning. Keep in mind that starting to plan too late is one of the major pitfalls of retirement planning.

 

Put your plan into action   

Start by envisioning the retirement you plan to enjoy. Next, list out your financial resources to check if you have sufficient funds to support all the plans you have in mind. There are many retirement planning calculators online that can help you to assess how much you will need, to have a comfortable retirement. This calculator will show you the amount of money you should have to maintain your desired retirement lifestyle. The breakdown will be how much money you require monthly and the number of years of income you will need throughout your retirement. Also factored in will be an inflation percentage as cost of living rises throughout the years.

Alternatively, you can also seek the services of a financial consultant who can guide and advise you on how to plan for your retirement. A certified financial consultant can help you develop your retirement plan as well as periodically monitor, re-evaluate and revise your plan accordingly.

 

Saving for a comfortable retirement

As the retirement calculator figure shows just how much you will need post-retirement, it’s best that you start saving as early in your career as you can. Typically, setting aside between 10% and 15% of your monthly salary is one way to save for your retirement. Not saving enough, or early enough, say experts, will see you outliving your savings.

As you get older, do bear in mind that you will likely need to spend more money to maintain your health and wellbeing. Having health insurance to cover you into your golden years will be of great help when illnesses strike. Instead of turning to your savings, health insurance will come in handy to pay for your medical expenses.

Another option to consider is by investing in an investment-linked plan. This two-in-one plan not only provides insurance coverage for death, total and permanent disability, critical illness or health, but it also have investment component which can help you to customised as an savings plan towards retirement. [JT1] By diversifying your savings plan, you will be able to save much more, helping you to reap the benefits to sustain your livelihood long after retirement.

Embrace change and stay positive

Retirement is a situation that requires you to embrace change. Some may experience anxiety and depression in the early stage of retirement while others may only be too happy to adapt to a new lifestyle. But whichever situation you find yourself in, you’d definitely have some peace of mind if you’ve planned for your retirement wisely.

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