Do You Have Financial Security?

When I read the local newspaper, The Star, yesterday… I thought it was something that I needed to share with all my blog readers and do some good in preparation for your retirement. Although the case study and story are based on what’s in Malaysia, you can be sure that it happens in all other countries (only the numbers and percentages might change slightly).

For those who are not from Malaysia, EPF=Employee Providence Funds and RM1 is about USD$1/3.4.

Here’s what’s on the front page of the newspaper:

Can You Retire?

Trends

[+] People are living longer - life expectancy for women is 76 years and men 72
[+] They are marrying and having children later. At retirement age, the children are still in school or university
[+] 70% of retirees use up their EPF money within three years after retiring

Living Costs and Inflation

[+] Inflation rate is 6% in urban areas
[+] 3 meals a day at RM20 now may cost RM64 in 20 years
[+] RM500,000 in your EPF or bank account at retirement may have the purchaing power of RM145,053 in 20 years
[+] Medical inflation is 15% each year

Case Study

If a family in Kuala Lumpur with two kids and two cars needs RM5,000 today, at retirement, expenses should go down to RM3,500 or 70% of one’s lifestyle.

One would need RM747,000 if one were to live for 25 years, but the average contributor has only RM106,000 in his EPF account when he retires.

Most Malaysians DO NOT HAVE Financial Security

Then, continuing on the article on page 25-27, you’ll find more details or this scary, factual and detailed findings. Let’s all just face the facts and do something for us and our kids.