Have you ever stopped to ponder how much the retirement landscape has transformed over the years?
Many forget the importance of retirement planning, especially Malaysians.
A recent survey by Malaysian financial services website RinggitPlus revealed that 70 per cent of Malaysians saved less than RM500 per month (S$153) in 2022 or did not save at all.
This is compared with 52 per cent of Malaysians saving less than RM500 monthly in 2021, the largest year-on-year increase since 2018,” the RinggitPlus Malaysian Financial Literacy Survey 2022 showed.
The Changing Landscape of Retirement Planning in Malaysia
Increasing Living Costs Over Time
Picture this: back in the day, a cup of your favorite local coffee and a hearty plate of nasi lemak cost just a handful of coins. But hold onto your kopitiam seats, because living expenses have been dancing to the inflation tango. 🕺💃
From groceries to housing, the costs have soared, making it crucial to stash away more for your golden years. Living like your parents did might sound sweet, but keep in mind that the prices have waltzed to a whole new beat!
Source from Focus Malaysia.
The Ideal Retirement Fund Size
Now, here comes the million-ringgit question: what’s the secret number you need to conjure up in your retirement cauldron?
While it’s not exactly a magic trick, it’s a sum that can spell the difference between sipping coconut water by the beach or counting every sen.
The minimum retirement fund can vary, but experts often point to around 25 times your annual expenses.
So, if your desired retirement lifestyle costs you RM40,000 a year, you’d want to aim for a cool million-ringgit nest egg. 💰💼
How Long Will Your Savings Last?
You might be thinking, “Alright, I’ve got my million bucks in place. How long can I float on this pool of savings?” Well, hang on to your inflatable donuts, because the answer isn’t as straightforward as a cannonball splash.
On average, Malaysians are living longer – a hearty hooray for that! 🎉
However, this means that your retirement fund needs to paddle through more years of supporting you.
The rule of thumb often suggests aiming for a retirement fund that can last at least 20 to 30 years.
But don’t worry, we’re not here to burst your retirement beach ball. With smart planning, you can set sail into your golden years with a well-prepared ship that navigates the waves of time and expenses.
The Third EPF Account
Why the Third EPF Account?
Picture this: you’ve got your main EPF account and your EPF Account 2, both playing their roles in your financial journey.
But here’s the twist – the Third EPF Account adds a new layer of opportunity. It’s like discovering a hidden treasure chest within your treasure chest!
Numbers Speak Louder Than Words
Let’s break it down with an example.
Imagine you’re in your 30s, juggling work, bills, and the occasional travel adventure. You’ve been diligently contributing to your EPF, and it’s growing steadily.
Now, with the Third EPF Account, you can channel a portion of your contributions into investments that could potentially yield higher returns over time.
Diverse Paths, Brighter Future
Imagine this scenario: you’re looking ahead to retirement, and you’ve got big dreams – traveling the world, launching that passion project, or simply living comfortably.
With the Third EPF Account, you have the chance to diversify your investments and potentially increase your retirement fund. It’s like having different streams of income flowing into your future.
Diversifying Retirement Security with Unit Trusts
The Power of Diversification
Imagine this: you’re planning a picnic, and you’ve got a variety of delicious snacks to choose from. If one snack doesn’t hit the spot, no worries – you’ve got other options that satisfy your taste buds. Now, apply this concept to your retirement security.
Unit Trusts allow you to invest in a diverse range of assets – like stocks, bonds, and real estate – all bundled up in one neat package. It’s like having a buffet of investments that work together to potentially enhance your returns.
A Numbers Game with Real-Life Impact
Let’s break it down with numbers. Say you’ve been contributing to your retirement fund for years, and it’s grown to a substantial amount. Now, imagine channeling a portion of that fund into Unit Trusts. By doing so, you’re expanding your investment horizons, aiming to tap into various markets’ potential growth.
Picture-Perfect Scenarios
Here’s an example scenario: You’ve got your EPF savings humming along, and you’re looking to boost your retirement security. You decide to invest in Unit Trusts, spreading your bets across different asset classes. Over time, you see your returns growing, adding an exciting layer to your retirement nest egg.
Read more on whether Are Unit Trusts a Good Investment here.
So, are you ready to infuse a bit of flair into your retirement planning?
Unit Trusts offer you a chance to diversify your investments, potentially boost your returns, and create a more resilient retirement strategy. It’s like adding a pinch of excitement to your financial journey – a pinch that could lead to a flavorful retirement down the road.
If you woud like to know more about retirement planning, contact us to find out more.