Thursday, August 2, 2007

Can you retire?


What a question eh?But it's all about financial security.By hook or by crook people will get older.Definitely.But the case study that I had once read said only 5% of Malaysians are prepared for their retirement.Huh!And the other 95%?Rilex,not aware or not a big deal lah.

Most Malaysians do not have financial security.True isn't?Despite a growing awareness for the need to prepare for one's retirement,many do not translate their plan into action.Those in their 20s think they are too young to think about it,while those in their 30s-40s tend to believe they are doing enough because they have their EPF savings.

To tell you the truth,based on EPF's 2005 annual report,90% of EPF contributors have less than RM100,000 in their account.I know that my parents are in that range too.Sadly not enough to see them through 20 years past retirement.

Let say if a family in Kuala Lumpur with 2 kids,2 cars needs maybe around RM5000 per month as today,at retirement,expenses should go down around RM3500 or 70% of one's current lifestyle.One would need around RM747'000 if one were to live for average 20-25 years after retire,but you see the average contributor has only RM106'000 or less in his EPF account when he retires.Even if both husband and wife's saving were taking into account,the sum would just doubled to RM200,000 ++.Still not reach half of the so called 'should be' enough saving money for retirement.

In addition nowadays people are living longer.Life expectancy for women is 76 yrs and men 72 yrs.They are marrying and having children later.At retirement age,the children are still in school or university which will obviously need their parents' help.And the most worst malaysians' trend
is that 70% of retirees use up all their EPF money within 3 years after retiring.Oh my!My mother herself already had a plan to renovate the house when she had that EPF money 2 years from now.It's definitely true.

The reality is - it is more pleasurable to spend than to save (yeah d**n rite!) and most of us (including me ok!) at our head we think about the need to plan and save but at our heart,emotions rule and instant gratification wins the battle.So again, can we retire?

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