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8 Planning Your Retirement THE STAR, TUESDAY 23 JULY 2019

Is it too late to
save for retirement?
HERE is the hard truth: Malaysians cannot
afford to retire with just Employees Provident
Fund (EPF) alone. When asked what advice
he had for people who would be retiring
soon, insurance adviser Augustus Jeremiah,
who has worked for more than 24 years in
the insurance industry, says “It’s too late. You
have to keep working. However, if you have According to a financial
just joined the workforce, you still have adviser, the ideal time
to start planning for
your retirement is when
Step 1: Start now! you start working.
Ideally, you should start planning for your
retirement as early as possible. Jeremiah
points out, “Let’s say you start working at the the years to come. You then have an idea of food to work. also utilise the magic of compounding
age of 25, and you work until you turn 60, the what you need to have to live comfortably interest, “the 8th wonder of the world” as
retirement age, that’s the working lifespan.
“However, you also have to consider your
when you retire.
Step 3: Be proactive Benjamin Franklin called it.
“Even if you compound it at 3% or 4%
time in retirement to the average age of 85
years old. This equates to 35 years to earn
Step 2: Be frugal Take the initiative to learn about your
finances. Read books, attend seminars and
over 20 to 30 years, the end result is
significant. Make your money work for you
and save, and 25 years to spend that money.” In the book Financial Freedom: Your Guide talk to people who have successfully saved when you start saving earlier.”
That means that as soon as you start to Lifetime Financial Planning by Edmond for their retirement.
working, you should already be planning for
retirement. With this in mind, what are the
Cheah, Wong Bong Choy, Alex Sito, and Rajen
Devadason it mentions that if you want to
The Government has seen the importance
of saving for retirement by setting up EPF.
Step 4: Insure your future
things to consider when planning for retire comfortably, you have to set aside at However, EPF has given Malaysians a false Even if you have sufficient funds, all your
retirement? least 40% of your total income. However, sense of long-lasting financial security. “The efforts will be in vain if you have to use that
l Inflation – “If your household expenses when earning a small amount, it’s difficult to amount of money saved through EPF is not money in the event of a misfortune. “You
is RM3,000, it could very well be RM6,000 do that. enough for most people. Every individual need to fill in an insurance programme form
when you retire. And then in the 25 years Jeremiah says, “When you’re earning a has to be proactive. Most do it by buying a as early as possible,” says Jeremiah.
that follow retirement, prices will possibly lower income, you can still retire property or having an investment “Insurance helps protect income that you
double. You must have sufficient funds set comfortably, but you have to live a frugal somewhere. have not earned. It can provide you with an
aside,” advises Jeremiah. lifestyle until you can save enough to invest “One of the easiest investments to start income if there is an instance where you
l Expenses – When calculating your future in something that will give you a return on with is a unit trust,” advises Jeremiah. can’t work.”
cost of living, calculate what your expenses investment.” Private Retirement Schemes (PRS), started Have a good medical plan that covers your
would be like. Take into consideration your Jeremiah advises people to find ways to in 2012, is a voluntary long-term savings and medical needs as well as conservative saving
housing loan, car loan and, if you have save money, such as not to change to the investment scheme designed to help you plans, as they are not high risk compared
children, what their education may cost in latest phone and start bringing home-cooked save more for your retirement. You should with other investments vehicles.

Putting words to action

TURNING 60 is significant in Malaysia as it provides a fair exit plan for retiring business
is the beginning of retirement. Some look partners, and the 3G Family Business Trust,
forward to retirement, but others see it as a which is suitable for those who want a
worrisome deadline. The difference smooth and harmonious handover of
between the two is whether one has a business to heirs upon retirement, incapacity
proper retirement plan in place. or demise.
Contrary to common perception, To help increase public awareness,
planning for retirement is not just about Rockwills is holding the Estate Planning
making sure you have enough to live. There Forum 2019 on Aug 18 at Sunway
are many aspects to cover in order to make Convention Centre to educate the public on
retirement something to look forward to. the importance of having effective and
A well-planned retirement covers practical life planning.
planning in many aspects, from financial to In conjunction with the theme, Plan Well +
healthcare arrangements to estate planning Live Well = End Well, there will be talks from
and even bereavement. Proper planning various speakers from the legal, medical, tax,
could save your family from a lot of financial and estate planning industries to
financial and emotional pitfalls. give the public an overall understanding of
The issue of people not planning for the various concepts of estate and wealth
retirement is mostly caused by a lack of planning to help them make better-informed
awareness or procrastination. Most are decisions. Furthermore, the aim of the event
unaware of the services available in the is to have attendees develop a holistic
industry, not bothering to find out or approach to their health, business succession
postponing action until it is too late. By and wealth planning issues so that
then, family members are usually caught in retirement becomes something to look
desperate situations such as being forced to forward to.
liquidate their assets to resolve debts.
There are solutions to protect your family n For more information on the speakers and
that are easily available, such as the talks, register online at www.RockwillsEvent.
Business Value Protection Trust, which com
THE STAR, TUESDAY 23 JULY 2019 Planning Your Retirement 9

Invest early for your golden years

MANY procrastinate on starting a
retirement fund, thinking there is
still a long way to their retirement.
However, they fail to realise the
effects of inflation on their
retirement funds. To ensure you
have enough time to build a stress-
free retirement, here are some
reasons you should start saving
while you are young.
l Financial independence – As
the saying goes, “Sikit-sikit lama-
lama jadi bukit.” When it comes to
investing your savings, the earlier
you start, the greater the
accumulated returns on your
original investment thanks to
compound yield. By investing
consistently and regularly, you will
be able to secure yourself a
comfortable, independent
retirement. Work towards
accumulating enough to cover the
costs of your basic necessities,
lifestyle expenses and occasional
l Saving is a good habit to
develop – If you start saving for
your future from a younger age,
you will find that it becomes second
nature. It will be easier to put aside
some money for retirement. It
helps to start with small amounts,
especially for young adults who are
just entering the workforce, so it is
not as overwhelming. How you

✔ You only need to allocate 10% from your salary to meet the 1/3 saving requirement.
manage your paycheck will
determine how you save for the
rest of your earning years. A person
who is used to saving on a monthly
basis will find it easier to set aside ✔ Start saving in PRS (Private Retirement Scheme) on a monthly basis.
10% of her salary for retirement
compared with an individual who
is not used to spending her money
✔ Building your retirement fund is simple, affordable and achievable.
prudently. Image source: Instagram/invest_with_public_mutual
l Gain control over your
future – When you set aside money Steps to successful Private Retirement Scheme (PRS) term investment horizons can n For more financial tips and
for your retirement, remember that
you are shaping your future.
retirement planning fund. PRS contributions are
creditor-protected. Public
consider investing in PRS non-core
funds, which can yield better
investment guidance, visit
Building a substantial sum for Mutual’s PRS contributors can potential returns in the long term. mutual
This is a task no one else will your retirement nest egg can be also enjoy a free insurance or
perform for you or push you to do. easy and painless if you start Takaful coverage of up to
By saving consistently, you are investing early and regularly. RM100,000, subject to terms and Disclaimer:
ensuring you are well prepared for Public Mutual’s Direct Debit conditions.
any outcome when you leave the Authorisation facility allows you To cater to diversified investor These articles are prepared solely representation or warranty is made by
workforce. With sufficient savings, to invest regularly while needs and investment objectives, for educational and awareness Public Mutual, nor is there acceptance
you will most likely be able to live employing the Ringgit Cost Public Mutual offers six PRS core purposes and should not be construed of any responsibility or liability as to
your dream lifestyle even during Averaging strategy. funds and three non-core funds, as an offer or a solicitation of an offer the accuracy, completeness or
your retirement years – promising Not only that, you can enjoy which make a great pool of funds to purchase or subscribe to products correctness of the information
you the peace of mind of a secure tax relief of up to RM3,000 per for investors to choose from. offered by Public Mutual. No contained herein.
financial future. annum if you contribute to the Young investors who have long-

Image source: Instagram/invest_with_public_mutual