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 Post subject: Retirement Plans
PostPosted: Mon 12 Mar 2007 11:38 
Anything from RM1.4 million to RM2.8 million. Financial planners differ on this, coming up with figures ranging between RM1.4 million and RM2.8 million.

Case 1: Assuming you are aged 35, and have RM500K as your current net worth including EPF money. To have a total of RM2.8 mil in 20 years, time, you need to save 2.3mil or 115K a year or RM9,583 per month. Less some EPF, you still need to save in cash no less than RM8,000 pm. How do you do that? :roll:
Case 2: Aged 35, 500K net worth, but aim for 1.4mil, which comes to 45K pa or 3,750pm or 3,000 excluding EPF. Still tough right? :cry:
Case 3: you are 35 and net worth is now 200K, and you save RM2000 a month. By 55, you will have 680K. Add new EPF 300K. All you have is less than RM1 mil. Will this be OK? :?

NST 12 March 2007 reports...

Certified financial planner S. Thechinamoorthy, of Monetmatters Corp Sdn Bhd, suggests RM1.4 million as the minimum sum a 35-year-old today should have accumulated at 55.

"RM1.4 million in 2026 is RM639,000 today," says Thechinamoorthy.

Malaysian Association of Chartered Financial Consultants president Lim Yan Chang said:
"But I should say that RM1.5 million would be the sum an average Malaysian would need to live comfortably in retirement," he said.

Citibank Berhad vice-president and head of investment business Danny Chang put it at nearly RM1.6 million.

"A person needs RM1,591,979 when he is 55 to last him the next 20 years," he said.

U Chen Hock, HSBC Bank general manager for personal financial services, said a person needed RM2.06 million to achieve a comfortable lifestyle in retirement.

He said the 35-year-old earning RM4,000 today would have RM500,000 in EPF savings by 55 but would still need to raise another RM1.6 million.

Prudential marketing and communications director Paul Khoo felt that one would need RM2.8 million to receive RM4,000 monthly for 25 years after retirement.

"The individual would have accumulated RM726,827 in his Employees’ Provident Fund account and assuming he has not withdrawn it for any reason, he has to accumulate RM2.1 million to meet his retirement goals."

ABOUT EPF…

"According to our statistics from 2005, the average contributing member has only RM100,000 left in his EPF account at 54.

"For many, the remainder could be their only source of retirement funds which evidently is not enough to last their post-retirement years and increasing medical costs."

She said 99 per cent of members withdrew their entire savings at 55.

"There are few who leave money behind in their accounts although the number of those who do so is increasing.

"What’s interesting is that our recent survey showed that, with hindsight, most said that if they could turn back the clock, they would have made monthly withdrawals instead of taking it all out in one lump sum."


http://www.nst.com.my/Current_News/nst/ ... index_html


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 Post subject:
PostPosted: Fri 16 Mar 2007 17:53 
Hmm... no response after 4 days.
No time to retire?
Or no need money to retire? :lol:


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 Post subject:
PostPosted: Fri 16 Mar 2007 18:00 
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Tun
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Location: Impian 5
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maybe everyone busy working to find $$$ so they can retire... hahaha... :)

ok, i know i supposed to comment something about this. gimme a few more days. :)

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 Post subject:
PostPosted: Fri 16 Mar 2007 18:22 
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Penduduk

Joined: Fri 02 Feb 2007 16:01
Posts: 200
tlleong wrote:
Hmm... no response after 4 days.
No time to retire?
Or no need money to retire? :lol:


You scared the SH#T of out us with this & asked why no response?!!! ... You practically got everyone working their tails off by now! :lol: :lol:
No time to retire? It's like no time to stop working, brother! Have to do catch-up :lol: :lol: :lol:


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 Post subject:
PostPosted: Fri 16 Mar 2007 20:01 
Hey bro, keep working!
Nah, I think some of you guys have figured it all out... :lol:
Me... I'll tell you when the time comes. Hehe!


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 Post subject:
PostPosted: Sat 17 Mar 2007 11:06 
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Pegawai Daerah

Joined: Tue 02 Jan 2007 17:57
Posts: 1341
honest opinion..... i agree with the report.... to add further to it, i believe that with makan gaji and savings alone, one cannot hit that target, unless u work with McKinsey or is currently a senior senior manager with some MNCs.... savings will have to be converted to investment.... let money work for you.... once you have already accumulated enough..... working for money, u will only be frustrated in the end.....

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PostPosted: Sat 17 Mar 2007 13:50 
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Tun

Joined: Sat 03 Mar 2007 13:50
Posts: 9484
Location: Setia Tropika, U13/20D
tlleong wrote:

Certified financial planner S. Thechinamoorthy, of Monetmatters Corp Sdn Bhd, suggests RM1.4 million as the minimum sum a 35-year-old today should have accumulated at 55.


Am I reading it correctly:-
if you are 35yo today, you need to have 1.4m NOW as net worth if you would like to retire comfortably at 55.

If this is the case, no offend for those that already make it, but 95% population in Malaysia wouldn't be able to retire lioa!

Honestly, if I have 1.4mil now, I would expect to retire at age 45, and not 55.


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PostPosted: Sat 17 Mar 2007 16:17 
linustw wrote:
tlleong wrote:

Certified financial planner S. Thechinamoorthy, of Monetmatters Corp Sdn Bhd, suggests RM1.4 million as the minimum sum a 35-year-old today should have accumulated at 55.


Am I reading it correctly:-
if you are 35yo today, you need to have 1.4m NOW as net worth if you would like to retire comfortably at 55.

No, he is suggesting that a 35 yr old needs a total net saving of 1.4mil by the time he is 55. He went on to say that amount of future money is equivalent to 639K of today's money - he assumed you earn 4% p.a. on that money for next 20 years.

A simple way to check: 639/15 years=42.6=3.55K per month
Assuming inflation simply cancels out the nominal earning power of your 639K today, you will have 3.55K real money per month to spend between age 55 and 70. Hmm... is that enough? What if you live till 80? :cry:
Illness, children's education... wife nagging... :lol:
If 3.55Kx2=7K+, good enough for most. That would imply savings of 2.8mil by 55 years old. Not so easy...

Perhaps that's why most people either keep working after 55 or make whatever money you now have to work harder than a mere 4%!

But seriously, in this country, how can you invest to earn say 8% p.a. consistently with reasonably low risk? Properties? Stocks? Unit trust? :roll:

There we go again - back to the age old subject - how to make money with money... :P


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 Post subject:
PostPosted: Wed 11 Apr 2007 11:17 
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Penghulu
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:lol:
Just saw this thread. RM1.5m to retire comfortably? Sure boh - based on what kinda inflation rate per annum ar?

Heheh - based on my simulation on my own family's cost of living & actual personal inflation rate 6% (we don't just buy controlled priced items yar? thus, it ranges from 4% to 8%), we'd need RM4.6M in differing investment vehicles to generate $371K per year (with 25% reinvested) for living expenditure.

Then again, I'm the kinda "cup is half-empty - can still fill more" kinda guy :wink:

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 Post subject:
PostPosted: Wed 11 Apr 2007 12:16 
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Pegawai Daerah

Joined: Tue 02 Jan 2007 17:57
Posts: 1341
wah, yr cost of living per year is 371K ahh??? wah again.... dun know what to say....

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 Post subject:
PostPosted: Wed 11 Apr 2007 12:24 
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Penghulu
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Location: Subang Jaya
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Yeah - in 20 years time leh.

- It's $90K+ @ annum current value of money. That's post-taxed $.

-Add 28% tax (aiya - the Gov whack 28% from our dividends and returns from investments 1st mar, then we gotta go argue, chase and claim back from LHDN). That makes it $116K pre tax $ needed

-Then add accumulated inflation for 20 years at 6% pa.
$116K X (1+6%)^20
fyi - the karat (^) is "power of"
That comes to $371K per annum when I'm 55.

-Planning to have a "perpetual well" to drink from, thus:
*never touching the "base-pot", only the returns
*factored in reinvesting 25% of all returns
need in total appx $4.6M (based on prudent returns) to perpetuate the above :shock:

Anyone wants to buy a healthy kidney? :cry:

_________________
My own baby steps
1. Money & Risk management (spend less, save more, just enough term insurance)
2. Investments (Asset Allocation, Value investing, Value & Dollar Cost Averaging, etc.)
3. Giving back

moneytology.blogspot.com


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 Post subject:
PostPosted: Wed 11 Apr 2007 12:39 
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Tun
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Joined: Sun 01 Oct 2006 13:28
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wongmunkeong wrote:
Anyone wants to buy a healthy kidney? :cry:

i hear u can get good price at ebay... :)

make sure put reserve price at rm4mil...

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 Post subject:
PostPosted: Wed 11 Apr 2007 12:52 
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Pegawai Daerah

Joined: Tue 02 Jan 2007 17:57
Posts: 1341
ok, dun think that i will ever be able to retire....

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 Post subject:
PostPosted: Wed 11 Apr 2007 14:54 
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Penghulu
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Joined: Tue 16 Jan 2007 15:12
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It can be done lar :wink:

Even based on a lower than current tracked returns (mine) - by investing about RM2,000 to RM3,000 per month (whole family ar - my pay aint that high unfortunately), I can achieve $4.6M (inclusive of EPF & EPF-->Funds).

It's shocking at first BUT if you work at it, you'll win. You already KNOW your "enemy" and target. Now you gotta work out HOW to overcome :D.

_________________
My own baby steps
1. Money & Risk management (spend less, save more, just enough term insurance)
2. Investments (Asset Allocation, Value investing, Value & Dollar Cost Averaging, etc.)
3. Giving back

moneytology.blogspot.com


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 Post subject:
PostPosted: Wed 11 Apr 2007 15:49 
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Pegawai Daerah

Joined: Tue 02 Jan 2007 17:57
Posts: 1341
wah, constant 2-3k ahh... susah lah... then have 2 cut down on everything else... if like that really living 100% for tmw! how 2 go for holiday? was thinking of getting the nokia n95, now hear this stuff, have to rethink again!!

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