Ready to Retire?

1:56 AM

Raising the age for full withdrawal of EPF (Employers Provident Fund) savings from 55 to 60 years old. 

What do you think? Most EPF contributors are against this idea. It is understandable as it is THEIR money. But consider the following:

1. 70% of EPF contributors had less than RM 50,000 in their accounts upon their retirement.

2. The average life span of Malaysians has increased from 68 years old in 1980 to 74 years old in 2012.

3. Even with at least RM 196,800 in savings upon retirement, EPF worked out that an individual will have to live by RM 820 per month for 20 years.

Is RM 820 per month enough? It does not factor in the (roughly) 6% inflation rate (do you actually believe the 3 - 4% official estimate?). Just look at how much a plate of Nasi Lemak cost 20 years ago. How much can a person buy with RM 820 in 20 years?

Furthermore, once retirement sets in, everyday is a weekend. On which days do people spend the most money on? Weekend or weekdays?

I agree in principle what EPF intend to do. It's intention is good. But in practical sense, it may not be a good idea. Yes, there are retirees who blow all their savings within a few years such as renovating their house, buying a new car and get caught in get rich schemes.  However there are genuine retirees who need the money for health treatments and their children's education.

A better approach would be to let EPF contributors decide for themselves. Give them the option. At the same time conduct education programs for future retirees on money management.

For those who just started working, this should be a wake up call to plan ahead for retirement. It is NEVER too early to plan. However, my idea of retirement is not to NEVER WORK AT ALL but

Get paid doing whatever I love to do

My aim is to be able to have MULTIPLE STREAMS OF INCOME. I can sleep, play with my kids, read a book and still make money and give some back to the society. But this is a work in progress. I have not reached a point where I can do all that yet.

Money management is important. Unfortunately, it is not taught in school or university. I am in the process of fine tuning my money management myself as the first few years of my working life was riddled by financial mistakes.

People still asks me these questions (assuming that doctors are paid handsomely)

"Buy la that corner lot house doctor, you can afford what"

"Change la this car. Get the new CRV. Only RM 120,000. You can afford"

"Boss, tukar la to iPhone Plus. Best woh"

At this point in time, NO, I can't afford all that. I am still (relatively) young and I need to build my asset column first. And YOU, my fellow readers, should build yours too.

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  1. On a practical sense, we need to lock the EPF at a higher age...

    "Bekerja seperti hidup seribu tahun lagi" aka you might live longer than you think... Poor.


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