Retirement Planning

Every retirement lifestyle has a price. What is the price that you are willing to pay now so that you can secure your retirement lifestyle ?

Here is a list of common mistakes that we should avoid.

  1. Not having a retirement plan
    Failing to plan is planning to fail. Time is working against investors. Review asset allocation, investment performance and total savings on a regular basis and make changes when necessary.
  2. Not protecting savings
    About five years before retiring, people should start to focus more on protecting their savings rather than growing them. Investor can reduce risks by shifting their assets to more conservative investments and consciously avoiding borrowings or taking early withdrawals.
  3. Investing too aggressively, or too conservatively
    Investing is simple but difficult to execute. Always bear in mind that investing is for medium to long-term and to diversify and save systematically.
  4. Not understanding diversification
    By diversifying, retirees can avoid losing all their income if one of the sources of income loses value. Fund for allocations can include Employees Provident Fund(EPF), pensions, fixed deposits, unit trust investments, property investment, commodities investment and other sources.
  5. Retiring with too much debt
    Malaysians are entering their retirement years with heavy debts. Credit card, mortgage and other forms of debt can deplete savings.
  6. Not taking inflation into account
    Inflation will slowly affect retirement fund and purchasing power, and subsequently eat into their fixed deposit and EPF returns.
  7. Not saving early enough
    “ Procrastination is the thief of time.” Many people believe they will have plenty of time for retirement planning. The more time people have until retirement, the easier the task is to achieve their retirement goals. So it is never too early to start !
  8. Not investing regulary
    Many people start investing and let their portfolio go into sleep-mode. From time to time, there will be changes in personal needs, spending patterns or lifestyle goals that call for adjustments to their investments.
    Investing regularly and adopting long-term approach will make money work for you.
  9. Not taking healthcare costs into account
    Malaysia’s healthcare costs have increased over the years and not setting aside certain percentage of retirement income for healthcare can have a negative impact on your retirement fund.
    Get adequate insurance coverage such as critical illness insurance, personal accident insurance and healthcare insurance to ensure the retirement saving is not depleted prematurely.