PLANNING YOUR RETIREMENT
THE STAR, TUESDAY 25 JULY 2023
Live comfortably in retirement
AFTER decades of hard work,
your retirement should be a
time of leisure, where you can
kick back, relax and not worry
about having to work any more
to cover your costs of living.
To be able to live comfortably
and enjoy your golden years,
sufficient retirement funds are
needed to bankroll your desired
retirement lifestyle. The total
retirement fund needed to
achieve this will depend on your
estimated monthly expenses once
you’ve stopped working. For
example, if you plan to have at
least RM5,000 a month during
your retirement, you’ll need to
save up to RM785,119 by the
time you decide to retire.
This prediction is based on the
assumption that you plan to have
a retirement period of 20 years
and your retirement expenses
are withdrawn annually at the
beginning of the year, as well as
there being a rate of return of 8%
and a yearly inflation rate of 3%.
Thus, it is important to start
your retirement planning early
so that you will have enough time
to save and invest, build your
retirement fund and benefit
from the power of compounding
interest. At the same time, you
will have to remember to take
into consideration various
factors that could affect the
amount that you will need in
your retirement nest egg.
Retirement age
Depending on how long you
want your retirement to be, you
will have to adjust and manage
your savings to follow suit. For
example, if you plan to retire
earlier and have more time to
relax in your older age, you will
need to save and invest more to
cover the additional years of
retirement.
Lifestyle
Your desired retirement lifestyle in the prices of goods and
plays a major role in determining services and the fall in the
how much you will need to save
to build on your retirement funds. time. This means that the amount
If you plan to have a lavish
lifestyle, then you will need to
save and invest more as well
to be able to fully enjoy your
retirement.
Inflation
Like it or not, we can’t escape
inflation. Inflation is the increase
purchasing value of money over
Invest early to
retire in comfort.
of money you have saved for
retirement may not be as much
as you think by the time you
retire. So, you will have to factor
in the economic phenomenon in
your retirement planning.
Healthcare costs
Similar to inflation, the cost of
healthcare will continue to rise
over time, this is known as
medical inflation. Coupled with
the increased life expectancy
rates globally, healthcare costs
can eat into your retirement
fund, especially if you have not
planned for it in advance.
Start planning today
While having to plan every
step of the way to make sure you
will be able to retire comfortably
may seem daunting, Public
Mutual Berhad has set up several
applications and tutorials to
make things easier for you.
The Public Mutual Retirement
Planning Calculator can help you
get a better estimation of the
amount that you would need
during your retirement. Public
Mutual has also curated a special
Retirement Virtual Workshop
educational video to help
Malaysians make the first steps
in their retirement planning
journey.
n For more information, visit
https://www.publicmutual.com.
my/Menu/Financial-Planning-
Services