For engineer Timothy Lim, having sufficient savings for later years is crucial for him and his family. A father of two children, aged 7 and 14, his priority is to ensure his children’s future in terms of health, education and social needs are well taken care of.
“I like to plan. My wife says I’m a total control freak but to me, it is important to have a plan.”
According to AXA Retirement Scope 2010, a global retirement study conducted across 26 countries in Europe, the United States and Asia, 55% of working Malaysians said having children is the main trigger to start saving for retirement.
It is my responsibility as a parent to make sure that their future is secure and to give them the opportunity to experience life to its fullest. That’s what my father did for me – he made sure I got a good education and grew up in a comfortable environment,” he shares.
Timothy also believes in protection from unpleasant surprises.
“Nowadays, you hear many cases of strong, healthy people being stricken by scary diseases. Life is so unpredictable! I’ve signed my family up for a medical programme; I certainly do not want to use my retirement savings if I need to check into the hospital,” he says.
The AXA retirement survey found that 92% of Malaysians look at retirement as a period when they will have more time to spend pursuing their interests. However, some 75% of working Malaysians said they could only continue to enjoy life if they keep working.
Lim is one who plans to continue working after retirement.
“I’d probably work as a consultant to maintain the lifestyle I’m enjoying now. When my children are able to fend for themselves, I can relax with my wife and truly enjoy our remaining years – that is our retirement goal,” he says.
Public relations practitioner Mala Chandran is in no rush to retire early either. “I don’t want to lose the comfort zone I currently enjoy. When I am old, I want to have more than enough to pay for my holidays, beauty and wellness and exercise programmes,” says the 30-something professional.
Although many people think their obligations will decrease as they age, Mala disagrees. “The more you earn, the more high maintenance your life becomes. I believe I will need more money in my old age because the cost of living will escalate in the future,” she says.
“Right now, we cannot anticipate what our medical condition will be like in years to come and we have to make allocations for the medications we may need.” Old age, Mala stresses, can bring about unforeseen changes in one’s health conditions.
Everyone should have money in hand for medical bills, she says, adding that it is the thought of falling sick in her old age without substantial savings to pay for medical bills that prompted her to review her savings plan.
“There may also be an increase in the cost of living in the future because the price of petrol will go up, toll charges will increase and cost of dining out will be higher, so we must have a good retirement plan,” she notes.
She believes someone who survives on RM3,000 a month now would probably have to look at doubling the amount in 20 years. That is why saving for her future is constantly on Mala’s mind, and she has been investing her money in property, stocks and bonds and investment policies.
The future is also constantly on the mind of 38-year-old accountant Chang Siew Li, especially since she had her baby five years ago. In fact, says Chang, she started saving for retirement after giving birth.
“My daughter is the love of my life. When she was born, I realised I had to start saving for my retirement. I want to provide her with the best that I can give and ensure that she has a bright future. I do not want to burden her when I’m old.”
When she was younger, she confides, she would spend most of her pay on new handbags and clothes. Her lifestyle did not change much even after she got married, she adds.
“When we first got married, my husband and I worked hard to ensure we had a comfortable life. We frequently went for movies, dined out and jetted off for holidays at least twice a year.”
But when they had their baby, they realised they needed to change their spending habits and start saving for their retirement.
Chang concedes that it is not easy to raise children today, especially to provide them with a good tertiary education. “As parents, we want to make sure our child will have a good life. We know that her education will use up a lot of our savings, but we are ready to sacrifice everything to give her the best education.”
In addition, they are saving to prepare for the unexpected. “We do not want unforeseen events to affect her future or burden her with our medical costs later,” she says. Their planning for retirement is quite simple, she shares.
“We started with regular savings first before making fixed deposits in the bank. Recently, we started investing, small amounts at first, in trust funds. We know we can’t just rely on our EPF savings; it will not be sufficient,” she adds.
AXA Retirement Scope 2010 shows that working Malaysians have become more concerned about their ability to finance a comfortable retirement experience. Only 37% consider their future income will be sufficient compared with 62% in 2007.
Chang and her husband also worry that their retirement planning may not be adequate. “We wish to have peace of mind when we retire at 55. We do not expect a high lifestyle after retirement – we just want to maintain a modest lifestyle and, most importantly, enjoy good health.,” she says.
“We do worry sometimes that our planning may not be enough. Although we lead a healthy lifestyle, we know we might still fall ill one day. When we retire, we do not want to burden our child. Some people may believe that children should take care of their parents when they retire but we prefer to be independent,” she stresses.
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