RETIREMENT PLANNING
While all of us would like to be financially comfortable in retirement,
many of us do not plan effectively to achieve this goal. Taking care of
present-day concerns often seems more important than planning for
future needs. However, if you wish to enjoy a financially comfortable
retirement, you must begin planning to do so early. The longer you
wait, the harder it will be to achieve your goals.
Effective retirement planning requires the identification of specific
goals and the implementation of an investment plan designed to
achieve those goals. The first step is the identification of the amount of
income you will require in retirement to maintain your preferred
lifestyle. Most financial planning experts suggest using 70% to 80% of
your pre-retirement income as a benchmark. Pre-retirement income
refers to the amount of income you expect to be earning at the time
you retire, not necessarily your current income. When projecting your
pre-retirement income, you will need to take into consideration the
effects of inflation over the years until retirement. For example, given
a 3% annual rate of inflation, an individual who earns RM20,000 today
would earn RM36,122 in 20 years even if he or she only receives
annual cost of living raises.
While EPF may provide you with some income during retirement, it is
unlikely that they will be able to wholly satisfy your retirement needs.
Most individuals will need to rely on their savings and income from
their investments to satisfy the majority of their retirement income
needs. As such, it is essential that you develop and implement as early
as possible an investment plan that is reasonably designed to achieve
your retirement goals.
Thankfully, there are a variety of investment options available to help
you save and invest for retirement. However, you must be familiar
with these options, and the benefits they provide, if you are to take
full advantage of them.
For investment options, please refer to Investment Planning.
many of us do not plan effectively to achieve this goal. Taking care of
present-day concerns often seems more important than planning for
future needs. However, if you wish to enjoy a financially comfortable
retirement, you must begin planning to do so early. The longer you
wait, the harder it will be to achieve your goals.
Effective retirement planning requires the identification of specific
goals and the implementation of an investment plan designed to
achieve those goals. The first step is the identification of the amount of
income you will require in retirement to maintain your preferred
lifestyle. Most financial planning experts suggest using 70% to 80% of
your pre-retirement income as a benchmark. Pre-retirement income
refers to the amount of income you expect to be earning at the time
you retire, not necessarily your current income. When projecting your
pre-retirement income, you will need to take into consideration the
effects of inflation over the years until retirement. For example, given
a 3% annual rate of inflation, an individual who earns RM20,000 today
would earn RM36,122 in 20 years even if he or she only receives
annual cost of living raises.
While EPF may provide you with some income during retirement, it is
unlikely that they will be able to wholly satisfy your retirement needs.
Most individuals will need to rely on their savings and income from
their investments to satisfy the majority of their retirement income
needs. As such, it is essential that you develop and implement as early
as possible an investment plan that is reasonably designed to achieve
your retirement goals.
Thankfully, there are a variety of investment options available to help
you save and invest for retirement. However, you must be familiar
with these options, and the benefits they provide, if you are to take
full advantage of them.
For investment options, please refer to Investment Planning.
| For an endless streams of income, you need a financial plan |
"Wealth Creation Through Financial Planning"
