Many Malaysians Can't Afford To Retire

Unlike nonsensical and unproductive issues raised by some politicians, this is something which will have a direct bearing on our lives. Retirement. It's not something many think about when they are young, and even those not so young in their mid-lives. Unless one has substantial wealth, one will probably have to work well into their old age.

Many youngsters start out in life full of optimism of striking it rich and retire young. Not many succeed. The question is, how many are prepared to work (as in earning a living) until they die? Not many. In our modern materialistic society most will try their best to accumulate as much wealth as they can because they want to retain their current lifestyles in their retirement age. Again many will fail.

A few prerequisites to be able to retire:

• must be debt-free
• must have a home to stay without paying
• 2/3 of current salary per month for expenses
• or minimum RM1000 to RM2000 per month for basic living expenses
• must have substantial savings for medical expenses or emergencies
• preferable without dependants.

From the time a person starts out in life, he will have 30 years to plan. Looks like plenty of time, but it's really not. In the 30 years, he will need to deal with inflation, rising cost of living and expenses, marriage, kids, education, cars, house, insurance, etc. Many in their 40s, 50s or 60s today realise that they could not afford to retire. Many of the young generation today will find themselves in the same situation in the future.

Rather than hoping, it will be wiser to prepare ourselves mentally & physically to continue working into our old age. If you managed to retire early and comfortably, then great. If not, well, at least you're prepared.

Personally, I feel it is perfectly fine to continue working as long as health permits. Given a choice, I'd choose good health anyday! 

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KUALA LUMPUR, Oct 5 ― Malaysia may be headed for a retirement crisis as tens of thousands of Malaysians depart the workforce for their golden years with less savings than is needed to keep them out of poverty.

According to recent figures from the Employees Provident Fund (EPF), the approximately 70,000 active 54-year-old contributors have an average savings of just under RM167,000 last year. The recommended minimum savings level is RM196,800.

The situation is made more alarming by the revelation that 69 per cent of all EPF contributors of the same age have less than RM50,000 in their accounts, as made known by the fund’s chief executive, Datuk Shahril Ridza Ridzuan, last month.

But even RM167,000 is scant consolation. As the average Malaysian expected to live until 75, retiring at 60 with that amount would mean surviving on just RM700 a month for the rest of their days.

With that amount, retirees would technically slip below the RM830 per month threshold that is indicative of poverty conditions in peninsular Malaysia, based on the Statistics Department’s poverty line income (PLI) for 2012.

According to Harveston Wealth Management financial adviser Annie Hor, a nest egg of RM167,000 could be made to last, but only if the retiree is completely free of debt and need not pay for accommodation.

“Otherwise you would be suffering a bit because if you just want a simple life, with three meals a day, maybe just get from point A to point B, petrol, you would need at least RM1,000 to 2,000 per month because, not forgetting when you are older, medical bills are expensive,” she told Malay Mail Online recently.

She added that her 60-year-old mother needs at least RM2,000 to get by in the city, even with her simple lifestyle.....

- See more at: http://www.themalaymailonline.com/malaysia/article/retirement-crisis-brewing-as-epf-savings-suggest-pensioner-poverty#sthash.cddlvIMN.dpuf