The "magic number" key to sound retirement planning
Retirement may be something in the distant future for you, but if you wish to enjoy your golden years in blissful contentment, early planning plays an important role.
From taking a well-earned rest in a lakeside home, starting up a cosy cafe, or even taking off for a half-year holiday across Europe, signing up for a full-time course in ballroom dancing, or simply spending more time with your loved ones, every retirement aspiration comes with a specific cost.
The question therefore is: What's your number? Do you know how much you need to have in your coffers to ensure a choice retirement awaits you on the horizon? Knowing your unique 'retirement number' is crucial and should form the basis of good retirement planning. Once you have a fixed target in mind, you will then be able to plan towards achieving it.
If you haven't found your retirement number yet and would like to do it now, just put yourself through a short, painless exercise. No sweat. It's easy.
Start by asking yourself what you envision your retirement lifestyle to be like.
Determine your expected retirement age, and the number of years that you will be needing income after retirement.
Conduct a check on your current assets and investments, e.g. your EPF savings or fixed deposits.
Now, calculate!
Arriving at your retirement number is easy once you have the above information.
The retirement calculator developed by Prudential available on WhatsYourNumber.com.my will help you include factors such as inflation rates, your EPF savings and others into the calculation.
The number revealed will be the indicative amount that you will need to sustain the lifestyle you desire upon retirement.
Now that you know your 'number', work out a strategy to ensure you get to enjoy the retirement lifestyle you've dreamt of.
5 Simple keys To Quality Retirement
Retirement… What would you do with all that time on your hands?
Travel around the world? Study full-time or perhaps even turn that hobby into a business? Whatever you choose to do, getting an early head start on your retirement planning can be invaluable in helping you achieve your dream retirement.
Follow these 5 simple key steps and you’ll find easy it is to achieve all your retirement dreams!
1. Remember, you’ll have even more time to enjoy
Due to advancements in medical technology, the average human lifespan has increased and as a result, retirement years are getting longer!
This means that you could possibly live out more years spending money, rather than earning it, as your retirement years could possibly outnumber your working ones.
So, take this into account when planning your retirement.
2. Know your goals
According to experts, savings totaling an equivalent to 70% of your pre-retirement expenses are needed in order to support a basic lifestyle.
However, if you wish to enjoy a higher standard of living, you will need more than that.
So ask yourself what you want to get out of your retirement and plan accordingly.
3. Understand the enemy of wealth accumulation
Inflation is the biggest enemy of wealth accumulation! Based on past inflation trends, 2.65 times of your retirement savings is needed just to meet the target amount you set 20 years ago*.
While many of us believe that keeping our savings in the bank is the best way to preserve it, experts suggest that avoiding risk eventually leads to capital devaluation as the interest rates offered can hardly outrun inflation.
An investment strategy that is able to balance risks and returns effectively in accordance with the different investment tenures is one of the key factors in achieving your retirement goals.
*Calculated based on an inflation rate of 5% p.a.
4. Start early and benefit from compounding interest
The sooner you start saving, the easier it will be for you to reach your goals, thanks to the power of compounding interest.
By saving RM10,000 every year from the age of 30 for the next 10 years at an interest rate of 10% p.a., you would have saved 87% more by age 60, compared with saving for only 20 years from the age of 40.
Time is one of the biggest factors affecting the growth of your nest egg as it is compounding. The longer the period, the greater the benefits of compounding tend to be.
5. Take full advantage of retirement tools
There are two types of retirement tools – Savings Plan and Health Protection that will help you to compose a retirement plan that best suits you!
Prudential offers a range of solutions – protection, savings and investments – that can best meet your financial goals and help you to achieve your retirement dreams.
Aging Gracefully
Growing old is a part of life. It can be the most exciting part of your life because your responsibilities reduce and you have more time to enjoy the company of those you love. Aging may bring about wrinkles, greying hair and aching limbs but like everything else, you can face it with grace to make the most of your golden years.
1. Let the fact sink in
You can always get your hair dyed or get Botox treatments, but you cannot escape aging. However, aging can be the best time of your life, so accept it and get a head start on getting the most out of your autumn years.
2. Keep a healthy routine
Exercising and eating right help to keep away the maladies that make life tough. You will enjoy your life so much better when you are in the best of health.
3. Don’t worry
Worrying and stressing out will only make you age a lot faster. So take it easy – Breathe deeply, relax and take a moment to appreciate the smell of your morning coffee or ponder the trickle of raindrops rolling down the window pane.
4. Control your emotions
When you lose your temper, physical changes occur within your body. But you must learn not to give in to anger or to any extreme emotion. Keeping yourself in good spirits helps you tackle any challenges that come your way and lets you enjoy life more.
5. Be friendly
Interacting with people helps to improve your mood and outlook. So don’t forget to always smile. Widen your social circle by joining a neighbourhood club to meet people with similar interests and share in the laughter of your neighbours’ children.
6. Widen your interests
Growing old doesn’t have to mean putting up with boredom. Fill your time by reading those books you put off reading for so long, attend lectures, participate in volunteer activities or even keep a garden. When you stay busy, your mind and body stay sharp.
Rediscovering The Beauty Of Retirement
Coping with the challenges of post-retirement life
One of the biggest transitions a person will experience in their lifetime is retirement. Although it is critical for us to ensure that we are financially sound and ready for retirement, retirement planning is not just about money. Unfortunately, most people are so caught up in planning for their retirement financially due to the escalating cost of living that they tend to overlook or neglect their emotional as well as their psychological and physical needs as they enter into retirement.
As we age, we may face many changes and many sources of stress — we may not be as strong as we used to be physically and mentally, we are more prone to illness and diseases, children move away from home, people we love die and loneliness creeps in. All these are just some of the challenges we may need to deal with during retirement. Although it can be difficult coping with these changes, it can be done.
Dealing with physical changes
As we grow older, our body will naturally change and we may not be as fit as we used to be. However, things aren’t really that bad if we stay positive. We could still do most of the things we want. All we need is a little time to adjust our pace. Remember that slowing down does not mean we have to come to a complete stop. Seek a physician’s help if you need to. Denying the changes of your body will only make life less enjoyable.
Dealing with loneliness
As children become more involved in their own lives, it is important for us to find ways to cope with loneliness. Hence it is important for us to plan the lifestyle side of our retirement besides taking care of the financial aspect of our retirement. The key to having a fulfilling retirement is to have an open mind. By interacting with people of all ages, it keeps our mind active and refreshed. You will be surprised at how much new things we can learn from the younger generations. At the same time, we can also share our experience with them. This could prevent us from developing senile dementia and depression. The best part is, we can even make new friends in the process. It is always good to have friends who share the same interest with you. If you can afford it, go travelling once a while. If you can’t afford long expensive holidays, a short trip to a place of interest with a bunch of friends is also a good form of relaxation. We can also enrich our lives by renewing contacts with neglected family members and old friends. All too often, our work gets in the way of our relationships and those we care about.
Actually retirement could be the best years of our lives if we plan for it not just financially but holistically. This is the time when we are free from most of our obligations and able to enjoy life to the fullest by indulging in what we want to do and best of all, we have the privilege to decide when and how we want to do it. Retirement is indeed a wonderful phase of our lives if we have much to live on and most importantly much to live for. So, stay interested and be involved with your life and you will discover the beauty of retirement and time itself.
This Article taken from Prudential Assurance Malaysia Berhad official website.
for more infomation please consults /call your licensed agent Mdm. Linda at +60195868418
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