In this time of uncertainty, how much do you need to retire comfortably? With Malaysia’s current economic situation, most of us can’t say for sure when we will ever retire as no matter how much we save, it never seems to be enough. Fret not, CompareHero to the rescue! Let’s figure it out together.
In 2018, Employee Provident Fund (EPF) suggested Malaysians have a minimum retirement savings of RM240,000 by the time they retire at the age of 55 to manage their daily expenses.
Here are two main problems with the suggested amount:
- Due to a low salary and duration of work, most Malaysians are not able to save that much by the time they retire at the age of 55.
- How do you budget your monthly expenses with the suggested amount of RM240,000? Nobody knows for sure how long they’re going to live…. Let’s say you’re blessed to live till the age of 80. Here’s a simple calculation of how much you can spend per month:
Can you live on RM800 per month, for the remaining 25 years of your life?
If it seems impossible to you, it's not too late to do something about it. Here are some tips to maximize your retirement savings.
Start now!
Here’s the thing about saving: no matter what your reasons are - retirement or emergency, the earlier you start, the better. Learn from our fellow Malaysians' retirement experience, here.
Know your retirement needs
Will you still be in debt when you retire? Is there a mortgage or car loan that will go past your desired retirement age? If that’s the case, you need to work out a budget for it. Try to take your retirement plan into consideration whenever you decide to take on new debt moving forward.
Find opportunities with good retirement benefits
The next time you’re looking out for a better opportunity, make sure to factor in retirement benefits. Certain companies in Malaysia offer to contribute more than the EPF statutory rate as one of the perks to attract and retain talent.
Related: Can companies contribute EPF at a higher rate?
Diversify your income
If you only have one source of income, it might take some time to achieve your retirement savings goal. Try to find anything of your interest that can generate passive income to boost your retirement savings.
Save consistently
This is the hardest part, right? Staying consistent and disciplined with your savings! One of the best ways to stay consistent is by setting a realistic goal for you to achieve and refrain from withdrawing your retirement savings no matter what. Worse comes to worst, access your emergency funds if needed.
We hope you benefit from this article and start planning your retirement as early as possible!
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