Plan your golden years

The Sunday Star today issues a very timely reminder to us all to start planning for our retirement NOW if we have not already done so. And do it 20 years in advance!

Accordingly, our EPF savings is not dependable unless we are financially disciplined. In a recent study by the EPF, almost 69% of retirees deplete their EPF funds within the first three years of retirement. If this trend continues, the majority of our retiree population will probably have little or no money left by their fourth or fifth year into retirement.

A recipe for disaster?

Also, by the EPF, as reported in The Star on 10 May 2005; "most of the contributors withdrew about 40% of the savings while they are still working. As a result, the average savings of the contributors was about RM90,000. This leaves most of them only a monthly average of RM370 to spend until the age of 75," basing on an interest rate of 5%.

So if a couple wishes to retire comfortably in their golden years with say, about RM5,000 per month, how much must they have? According to my amateur calculations, and assuming that all debts, loans, children's education, etc. have already been taken care of - their combined EPF and other savings should be not less than RM1.2 million.

Ada kah?

I haven't got that amount YET and I get cold sweat thinking of that.