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Funny isn’t it? More time is spent on planning a journey to Cherating than the journey through life.

The suitcase is packed. The fuel tank is full. The kids are raring to go. A holiday – perfectly planned! Is it a surprise then that more time is spent mulling over the details of a 2-day vacation than on the 20 years of life after retirement? Not so, it seems. Two out of three (66%1) Malaysians have not made provisions for retirement. After all, retirement does seem like a long time to come. Life in the present is brimming with opportunities to seize, people to meet and bills to pay. You’ll think about it, you say, when you finally … get there?


It’ll be okay, then?

There are many reasons why retirement planning is pushed to the back burner. Perhaps after you’ve paid your bills, you feel that you don’t have any left over to save. Maybe there are other priorities in life such as your child’s education or a new business. Or the age 55 is a mere speck on the horizon and there is no need to be concerned for the moment.
All of the above reasons appear valid for not saving for retirement. But are they? The longer you put off saving for retirement, the harder it will be to catch up. If you’re 31 years old now and need RM120,000 annually to maintain your current lifestyle, you’ll need RM387,011 annually when you retire in 24 years time, assuming inflation is just 5% per annum.3 The disturbing fact is that over 90% of EPF contributors have less than RM100,000 in their account.4   Without a retirement plan to supplement, the money may not see you through comfortably throughout retirement.


Fear the future no more

Unsurprisingly, parallel to the large proportion of Malaysians not planning for retirement, as many as 80% of the pre-retirement generations surveyed in Malaysia fear not having enough money in old age.2 It is ironic that many choose to live with the fear of financial inadequacy when it can be easily overcome. You can today determine the quality of your retirement.

How do you want to live…20 years from now?

Retirement planning is not about sacrificing the enjoyment of your present for your later years. It is about designing your lifestyle, for now and for the future. While no one can predict the future, retirement planning helps you take charge of those elements that you can, while you have the ability to do so. And it starts with a vision.


Detail the kind of life you would want to enjoy in your later years. Perhaps the kids have flown the coop. The mortgage is paid off. Your investments are bearing fruit. You and your spouse have planned a month long trip across South America. Impossible? Not if you plan right and very importantly, start early.


You know this well: Time is money.

Time is your greatest ally when it comes to saving for retirement. The power of compound interest can turn modest savings into an impressive amount. Of course, you should also consider two other key factors – the Rate of Return and amount of Contribution/Savings – which can affect your total end sum. However, time is one factor you should never underestimate or waste. Leverage on it while you can. The sooner you start, the easier it will be to reach your goals.

Your personal roadmap

Don’t wait. Kick start your retirement planning today. Take action. Set aside 2 days, or 2 weeks if need be, to shape your retirement plan. Of course, you can DIY your plan but it is suggested that you seek the help of financial advisors if you are at a loss as to where to start. Rather than leave a sizeable portion of your life to chance, let your plan lead you to where you want to be tomorrow.

A fulfilling retirement begins with one small step today. Talk to our Relationship Managers on HSBC Advance to find out about HSBC’s new retirement plan.

Call 1 300 88 0181, visit your nearest HSBC branch for more information or visit to register online.


Facts that figure

  • 70% of retirees use up their EPF money within 3 years of retiring.3
  • 41% of Malaysians do not plan on building a separate retirement fund.1
  • Even of those who do, 77% place their savings in plans that provide low yield.1
  • 73% of Malaysians do not seek professional financial advice when planning their retirement.


1. The Star, “Planning for retirement” April 4, 2009
2. The Future of Retirement 2008: Investing in later life.
3. Securities Industry Development Corporation, Malaysian Investor, “Saving for your Retirement, Part 1”.
4. The Star, “Phased EPF withdrawals, a better option” May 27, 2007

September 2012