Retirement Planning
Are you old enough to remember the good
old days when a worker stayed with one employer and retired with a "nice
pension"? Those days seem to be gone, maybe for good. Today, you need to
take charge and plan for your own retirement security.
Relying on EPF for the bulk of your retirement income is an iffy proposition
at best. Also, many companies today don't have traditional pension plans.
How much income should you plan on
needing when you retire? A
financial planning rule of thumb is to figure on needing 70% to 80% of
your pre-retirement income. That income is the income you'll be earning
at the time you retire, not the amount you're earning now.
In doing your projections, be sure
to consider the dramatic effect inflation can have on earnings and expenses.
Even at the relatively low 3% annual inflation we've been seeing in recent
years, someone earning RM30,000 today may be earning RM40,000 in 10 years,
RM54,000 in 20 years, and RM73,000 at retirement in 30 years if he or she
receives nothing more than cost-of-living raises.
You can use the our Retirement
Planning Calculator to estimate what your retirement income needs might
be and how much money you should be investing now to be able to meet those
needs when you retire.
Once you've determined your retirement
income needs, you need to plan for meeting those needs. The most advantageous
way to invest for retirement is to take advantage of various opportunities
to defer or avoid federal income tax on retirement investment earnings.
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