Created: 14 July 2021
Retirement is something to look forward to after a lifetime of working. However, the transition into the golden years can only be smooth and possibly less daunting if you are well prepared for it. That’s where having a good retirement plan comes in handy.
The word retirement conjures up bliss for some and worry for others but it is inevitable when one reaches the statutory retirement age. While some look forward to leaving the hectic work life behind to enjoy their golden years, there are those who view the idea of “not working” with a measure of apprehension. This is especially so when one has not planned well for retirement and has to worry about how long their savings will last.
However, many people like to take what life throws at them. They believe that life is full of challenges and when a challenge comes their way, they would deal with it then. On the other hand, there are those who prefer to plan for the unexpected and want to ensure their retirement savings or savings plan would get them out of any rut they may find themselves in. This is perhaps the wiser stance to take.
Importance of retirement planning
Whether you retire at 60 or get a few extra years at the workplace, the day will eventually come for you to retire. Retirement planning is then necessary to help you live with some sense of financial security when you no longer have a steady stream of income. Having peace of mind in your retirement will come from having planned for your retirement early on.
Generally, the rule of thumb says you will need about 80% of your pre-retirement net income to sustain a comfortable living. Assuming that your last pay was RM12,000 and take away 20% which goes to EPF, SOCSO and Income Tax, you would have a disposable income of about RM9,600. That’s the rough estimate you would need to live comfortably as you continue to pay your bills, loans or mortgages, children’s education, home maintenance, rising property taxes, and so on. This estimate however, does not include other things you may want to spend on such as renovating your home or going on a vacation.
If you’ve been keeping yourself fit and healthy, you may just get a long life ahead. This life could stretch for another 20 or 30 years, or even beyond that. Anticipating all the major events in your long life will help you plan your finances accordingly. By thinking ahead and planning well, you can rest easy knowing that your retirement savings can sustain your long life.
Insurance can offer great help
Being insured can offer great relief in many ways. For example, having a life insurance with a savings feature can come in handy when there is a need to withdraw the savings. As you plan for your future, do keep in mind that a savings insurance plan offers steady and safe returns as well as bonuses that help grow your finances. Needless to say, medical insurance is crucial to keep you protected in medical emergencies. As medical costs increase and being in your 60s and beyond means it’s likely that you will need some medical attention, it’s best to be protected with a medical insurance plan. A medical plan will offer great comfort and help you focus on recovery should you get hospitalised, instead of worrying about paying for the treatment.
Those who opt for an investment insurance plan that combines both protection and investment will see their wealth grow from their investments as they sit back and enjoy their retirement.
When to start planning for retirement?
Never wait till it’s too late. Planning in advance can make your retirement more comfortable. The best time to start planning is when you’re in your 20s or 30s. Typically young people think that it’s too early to even think of retirement when they have just begun their careers. Some just put the thought of retirement and planning for it in the back burner until it’s too late. Young working adults who start their financial planning for retirement early, will be assured of a secured retirement life and be able to enjoy the lives they built with all their hard work. As such, it’s always wise to plan ahead and not wait to cross the bridge only when you get to it.
Enjoy your retirement with peace of mind
After years of putting in the hours at work, you may really look forward to your retirement to slow down the pace and take life easy. Good retirement planning with financial stability may be the only way for you to enjoy true peace of mind and carry on leading a fulfilling life for years to come. While images of senior citizens in advertisements with smiling and contented faces, savouring their restful years paints a dandy picture, the reality is retirement can be daunting when your finances deplete fast. This will be further exacerbated when you fall ill and need to fork out a large sum of your personal savings to pay for the costs of your treatment.
Don’t wait to plan for your retirement. Do it now for a more secure future.