Retirement Planning

PLANNING YOUR RETIREMENT


Getting started
Good planning involves knowing what you want and then getting access to the most reliable information to help you get it. Before you can make any plans, you need to know where you are in life and where you are headed. That means reviewing your finances so you know exactly where you stand financially.


Know your retirement goals
More than investing and saving, retirement planning is about enjoying life after you decide to stop working. What will you do with your time? Where will you live? How will your family fit into your plans? The possibilities are endless - you may want to travel, engage in a hobby, volunteer, or even start a second or third career. It is important to develop a healthy lifestyle as well, so that you may enjoy the fruits of all your planning.


Things to be aware of
Investing in a retirement plan doesn't necessarily mean you will be financially secure when you retire. Here are some tips you may not be aware of when planning your retirement:
Start early. The best time to start a retirement plan is now. Avoid withdrawing money from your retirement plan Actively monitor your investments. Don't rely on your spouse's retirement plan. Don't forget to review your plan regularly. Practice good asset allocation. Check on your financial advisor. Make your retirement plan a serious priority.




WHY YOU SHOULDN'T WAIT
It's important to get started investing for your retirement if you haven't already. No matter what your age is, now is the best time. Let us show you how much waiting can cost you:

The Cost of Waiting
Monthly investment needed to build an RM500,000 nest egg by age 65



Assuming 8% annual rate of return, with all distributions reinvested. As you can see, your ability to reach your retirement goal will be affected the longer you delay investing. Time works for you, because one of the biggest factors affecting the growth of your retirement nest egg is compounding. The longer the period, the greater the benefits of compounding tend to be.


READY TO RETIRE? HERE'S A CHECKLIST:
To gauge your progress in retirement planning, use this checklist to see if you have considered these important issues!


Where do you want to live?
Many desire a smaller home with fewer chores, or move to a place where the pace of life is slower.

What will you fill your time with?
Depending on your personal preferences, you may choose lead an active or leisurely lifestyle. Are there any hobbies you plan to take up? Are there any plans to visit your grandchildren more often?

Would you like to work again?
Some choose to work part-time or embark on their own businesses when they retire.

What are your income needs?
Estimate your annual expenses, allowing for the rising cost of medical care, living, and taxes. Consider also big purchases such as a new car, or house downpayments for your children.

Do you know how much you can withdraw from your nest egg?
It is prudent to seek professional advice if you are not sure.

Have you re-evaluated your asset allocation?
Take a look at your portfolio's risk, and ensure a portfolio that is diversified.

Have you investigated long-term care insurance?
Consider purchasing these before you retire, especially medical and health insurance if your employer does not provide any retiree benefits. Start early as premiums will increase the longer you wait.

Will you receive employer-provided benefits?
Check with your company retiree benefits; these may affect the retirement date you select.

Is your estate plan updated?
Prepare or update your will and other documents.