Are Your Savings Enough To Last A Lifetime?

Maintain a comfortable lifestyle well into the future.

Young people nowadays are more concerned with living life luxuriously in the present than saving for their future needs.

However, the unexpected can happen at any time. Our jobs, families, and even physical health can present us with problems that we are not financially prepared for. That is when we will need to rely on our savings.

Everyone has to plan their budget and save at different stages of their lives. Savings can be used for a rainy day, tiding through times of illnesses, getting married, or even for the bigger things in life like tending to our children’s education needs, buying new home, and retirement.

According to recent survey, only 34% of Malaysians are putting aside money regularly for their retirement funds, much less their other future needs. *They seek material satisfaction instead of deferring their spending and fail to plan for wealth accumulation. Such a lifestyle will leave people ill-prepared for inflation and rising medical costs.

Inflation itself can be another intimidating factor. Today, three meals will cost someone RM20 a day, but in 20 years’ time, with inflation rate of 6% a year, those same three meals can cost up to RM64.** While this figure is suggested by our government to be 3,2% to 4.8%, wealth advisors have found that the figure can go up to 6% in urban areas.


EPF alone is not enough to tide most through retirement years.

In a recent EPF finding, it is reported that 60% of those withdrew all their contributions at 55 spent all of it within 3 years, leaving them destitute. With the life expectancy of men being 71 and women being 76, the average man now can go through the last 16 years of his life without income.***

But what can we do to avoid such a fate? The solution is simple: Start saving early. It is possible to plan our lifestyles in such a way where we can have what we want and still strengthen the bank account. From daily efforts like cutting back on our expenditure, and paying attention to our unnecessary splurging, we can plan our financial futures.

What Is Your Plan For Managing Your Finances?
Don’t put it off. The earlier you start, the more you stand to gain.

Sources:
* The Star, August 9th, 2007
** The Star, May 27th, 2007
*** The Borneo Post, Sunday, January 20th, 2008