Malaysian - Not Enough To Retire

The long-term impact of the global economic downturn will be felt for many decades to come, according to HSBC’s survey of 16,000 people worldwide.

A financial report by HSBC titled, The Future of Retirement, A Balancing Act on Tuesday said that 40% of them stopped or reduced their retirement savings during the downturn whether through investments (25%), cash deposits (24%) annuities (21%) or employer or personal pension schemes (19% respectively).

“Despite encouraging signs of economic recovery, the longer-term impact will cause waves for millions of people who have weathered the storm by raiding their retirement funds and amassing debt.

“This means that millions of people could enter retirement with savings diminished by a quarter or more after getting into debt or severe financial difficulty,” it said.

The report said that Malaysians were the highest in Asia (28%) to say that ability to save for retirement was impacted by debt compared to Singaporeans at 19% followed by Indonesians (24%).

“And despite signs that the global economy picked up in 2014, 32% of Malaysians feel that the recession and current economic downturn continue to blight their abilities to save for their retirement.” 

The report also said though 23% of the people around the world felt that their living standards would drop after retirement.

However, Malaysians were positive, with 58% expecting better living standards after retirement.
The report also said that two thirds (66%) of pre-retirees worldwide were concerned about not having enough money to live on day-to-day in retirement, rising to 88% in Malaysia.

“In Malaysia, women believe their retirement savings and investments will last for 11 years, but with an average retirement period of 21 years, this leaves 10 years when women will be reliant solely on any pension provision.

“Men will have enough savings for 12 years of retirement, but with a shorter average retirement period of 17 years, they will have lesser years relying solely on any pension provision,” according to the report.

It was found that 21% of Malaysian retirees felt they needed to start planning for retirement at the age of 30 or younger to maintain their lifestyle, while 5% go so far as to predict that they would never be able to fully retire from paid employment.

"With the benefit of hindsight, many retirees would have done things differently before they retired, to improve their standard of living in retirement. For example, more than two in five (45%) retirees say they would have saved more, and over half (53%) would have started saving at an earlier age," the report added.

Universal LIfe Insurance

The well-heeled in Singapore are increasingly looking at insurance not merely as a way to protect against the uncertainties of life but as a means to increase the wealth they leave behind.
Policies known as universal life insurance essentially work like regular life insurance except that they offer jumbo-sized payouts upon the death of the insured.

The allows them to leave behind a big pot of inheritance for their families.

Bank of Singapore (BoS) head of wealth planning Lee Woon Shiu noted that about 30 per cent to 40 per cent of the private bank's client relationships now have universal life insurance policies, compared with a "significantly lower" proportion just five years ago.

"People know that they can use this tool to create a large amount of wealth that can also serve as a liquidity solution. It can serve as a key- man planning solution, it can serve as a legacy planning solution, so it's very diverse in its potential uses."

 

A simplified example may help to explain how this works.

Assume that businessman Mr X - a 40-year-old non-smoker living in Singapore - has total assets of $5 million and he expects to spend about $1 million to meet his expenses for the rest of of his life.

If he does nothing, and there is no change to the value of his assets, he would leave behind $4 million when he dies.

If he decides to buy a universal life insurance with a premium that costs about $1 million but with a sum assured of $5 million, his total outlay would be $2 million, but he would leave behind $8 million upon his death.

Such policies are gaining popularity among the rich because they are flexible, so the insured person can choose what the sum assured is or the payment schedule, such as whether it is a one-time premium or regular payments.

Private banks may also offer to lend you money to pay the premium, with the caveat of pledging your assets, such as the policy itself or others, as collateral.

 

Universal Life insurance, however, does not come cheap. For example, the minimum premium for such policies for BoS' clients is typically about US$1 million (S$1.3 million).

One potential risk is that the returns from the policy may not be sufficient to cover the insurance costs and charges over the long term.

Top-ups of the premium may then be needed, failing which, the policy could lapse.
There is also the currency conversion risk involved, as policies are usually structured and denominated in US dollars.

Mr Lee said strong growth momentum in universal life insurance has been logged by BoS clients in Malaysia, Indonesia and particularly China.

The bank has also helped to arrange a policy for a wealthy client whose sum assured was as high as US$60 million, he said.

"It's a complement to what they have right now in terms of their stocks, bonds portfolio as it's a very good way to diversify the risks from the stock markets and financial markets into a very sustainable and stable option of universal life insurance," said Mr Lee.

AXA Top Insurer

With over 102 million customers in 56 countries and an employee base of 157,000, AXA is one of the world's leading insurance groups. Its main businesses are property and casualty insurance, life insurance, saving, and asset management. Its origin goes back to 1817 when several insurance companies merged to create AXA. The company is headquartered in Paris and has a presence across Africa, North America, Central and South America, Asia Pacific, Europe, and the Middle East.

In 2013, AXA as a move to increase its foothold in Latin America acquired 51% of the insurance operations of Colpatria Seguros in Colombia. During the same year, AXA became the largest international insurer operating in China as a result of its 50% acquisition of Tian Ping (a Chinese property and casualty insurer). In addition, the company acquired the non-life insurance operations of HSBC in Mexico. The AXA Group reported consolidated gross revenue of €91 billion for the year 2013.

EPF - Death & Incapapacitation Benefit

Losing a loved one is always painful and while nothing can ease that pain and suffering or replace that person, life still goes on whether one likes it or not, and for those left behind to live, money does become a factor.

That is where the Employees Provident Fund (EPF) comes in, not just for the savings the deceased left behind in the retirement fund but also for the goodwill payments made out by the fund for those left behind.

The goodwill payments also extend to those who are incapacitated and are no longer able to work and these payments are not paid out from the member’s savings. The EPF website states: “The Incapacitation and Death Benefits are a goodwill gesture by the EPF, payable to the member/guardian or beneficiary to help lessen the financial burden when the member suffers from incapacitation or in the event of death.

The money comes from EPF investment earnings and not from the member's savings.” It further states that the incapacitation benefit is paid to an EPF member who has lost his job owing to the incapacitation and has made an incapacitation withdrawal.

The incapacitation benefit amount is RM5,000 and will be paid out only once, subject to the member fulfilling the following conditions: he or she is a Malaysian citizen; has not attained the age of 55; has applied for incapacitation withdrawal within 12 months of the termination of service date; the last period of service must have been at least for a period of six continuous months; and the reason for his or her service being terminated must be due to incapability to work and not because of disciplinary action or voluntary resignation.

So if a person is incapacitated at the age of 40, will he be able to withdraw his savings and get this payment? An EPF spokesman told Theantdaily that if the person is no longer able to work, he would be able to withdraw his or her whole EPF savings and be paid an additional RM5,000 on top of that amount as a goodwill payment.

The EPF website states that death benefits are paid to the deceased member's dependant or next-of-kin when the application for a death withdrawal is made subject to consideration by the EPF. The death benefit amount is RM2,500 and will be paid out only once. So, what does “subject to consideration by the EPF” mean? It means fulfilling the conditions to qualify for the benefit.

The conditions to qualify are: one has to be a Malaysian citizen; member has not attained the age of 55 years at the time of death; and application for death withdrawal is made within six months of the date of demise of the member.

On the amount of incapacitation and death benefits paid out, the spokesman said he was unable to provide it offhand. Sometimes the EPF nominees and the next-of-kin would not be the same people but EPF would pay out the death benefits to the dependants or next-of-kin of the deceased member. “We have a process to determine this,” said the spokesman.

These amounts may not seem much, but for grieving families coming to terms with their losses or the loss of the ability to earn a living anymore, these goodwill gestures do go a long way to offer some semblance of comfort.

A Great Christmas Story

It’s just a small white envelope stuck among the branches of our Christmas tree. No name, no identification, no inscription. It has peeked through the branches of our tree for the past ten years or so.

It all began because my husband Mike hated Christmas--oh, not the true meaning of Christmas, but the commercial aspects of it -overspending...the frantic running around at the last minute to get a tie for Uncle Harry and the dusting powder for Grandma-the gifts given in desperation because you couldn’t think of anything else.

Knowing he felt this way, I decided one year to bypass the usual shirts, sweaters, ties and so forth. I reached for something special just for Mike. The inspiration came in an unusual way. Our son Kevin, who was 12 that year, was wrestling at the junior level at the school he attended; and shortly before Christmas, there was a non-league match against a team sponsored by an inner-city church. These youngsters, dressed in sneakers so ragged that shoestrings seemed to be the only thing holding them together, presented a sharp contrast to our boys in their spiffy blue and gold uniforms and sparkling new wrestling shoes.

As the match began, I was alarmed to see that the other team was wrestling without headgear, a kind of light helmet designed to protect a wrestler’s ears. It was a luxury the ragtag team obviously could not afford.

Well, we ended up walloping them. We took every weight class. And as each of their boys got up from the mat, he swaggered around in his tatters with false bravado, a kind of street pride that couldn’t acknowledge defeat. Mike, seated beside me, shook his head sadly, “I wish just one of them could have won,” he said.

“They have a lot of potential, but losing like this could take the heart right out of them.” Mike loved kids - all kids - and he knew them, having coached little league football, baseball and lacrosse. That’s when the idea for his present came. That afternoon, I went to a local sporting goods store and bought an assortment of wrestling headgear and shoes and sent them anonymously to the inner-city church.

On Christmas Eve, I placed the envelope on the tree, the note inside telling Mike what I had done and that this was his gift from me. His smile was the brightest thing about Christmas that year and in succeeding years.

For each Christmas, I followed the tradition--one year sending a group of mentally handicapped youngsters to a hockey game, another year a check to a pair of elderly brothers whose home had burned to the ground the week before Christmas, and on and on. The envelope became the highlight of our Christmas. It was always the last thing opened on Christmas morning and our children, ignoring their new toys, would stand with wide-eyed anticipation as their dad lifted the envelope from the tree to reveal its contents.

As the children grew, the toys gave way to more practical presents, but the envelope never lost its allure. The story doesn’t end there. You see, we lost Mike last year due to dreaded cancer. When Christmas rolled around, I was still so wrapped in grief that I barely got the tree up.

But Christmas Eve found me placing an envelope on the tree, and in the morning, it was joined by three more. Each of our children, unbeknownst to the others, had placed an envelope on the tree for their dad.

The tradition has grown and someday will expand even further with our grandchildren standing to take down the envelope. Mike’s spirit, like the Christmas spirit, will always be with us. This true story was originally published in the December 14, 1982 issue of Woman's Day magazine.

It was the first place winner out of thousands of entries in the magazine's "My Most Moving Holiday Tradition" contest in which readers were asked to share their favourite holiday tradition and the story behind it.

The story inspired a family from Atlanta, Georgia to start The White Envelope Project and Giving 101, a non-profit organisation dedicated to educating youth about the importance of giving. Theantdaily is happy to share this moving story with readers on this Yuletide season. - See more at: http://www.theantdaily.com/Main/For-the-man-who-hated-Christmas#sthash.FSaSlL3L.dpuf

Top Soft Skills

Communication and interpersonal skills came up tops across various sectors and functions in an evaluation study done by STJobs.

STJobs's evaluation consisted of employers who posted at least one job via the portal this year.
Although some of these skills are directly related to the job scopes and types of jobs posted, the top most in-demand attribute is one that unanimously straddles across varied positions, regardless of entry levels and/or industries.

No. 1 - Communication and Interpersonal Skills

No. of mentions in job postings: 24,328

Excellent communication and interpersonal communication skills are vital to workplace success. Being able to communicate concisely and with clarity - whether in writing or verbally - in a confident and effective manner is a key skill and requirement.

Good communication skills help to reduce barriers due to language and cultural differences, and avoid miscommunication as result.

Interpersonal skills enable people to successfully interact within the constantly changing and challenging landscape of the workplace, in which they are the key component of conflict management and resolution within the organisation.

No. 2 - Microsoft Office and Office Administration
No. of mentions in job postings: 11,531

Competency in administrative skills is a standard requirement in most businesses. Due to business processes, documentation and communication becoming increasingly complicated, it is important that job seekers have such skills in order to be able to do their work effectively. Microsoft Office remains as one of the world's most popular work programme to be used in offices globally.

No. 3 - Customer Service
No. of mentions in job postings: 5,572

Good customer service is essential in keeping loyal customers and developing referrals for future customers in a healthy business organisation. Good people skills increase the chances for a positive first impression and good customer service goes beyond the initial contact.

The most important customer service skill is the ability to deal with people, whether it is face-to-face, on the telephone or through written correspondence. Listening skills are also deemed as important for a good customer service experience.

Customers are the lifeblood of any organisation so many companies will go the distance to make sure they engage competent customer service staff that can maintain good relations with clients.

No. 4 - Sales
No. of mentions in job postings: 2,899

Aside from the fact that a business needs a good service or product to sell, employees with the ability to sell is one of the most important talents an organisation should have. A good sales person is aware of the wants, needs and expectations of the prospective customer and able to ask and questions plus build a sound relationship with him.

Companies are primarily concerned with bottom lines and P&L, so it's of no surprise that they are always in need of revenue generators at the frontline in order to thrive.

No. 5 - Accounting
No. of mentions in job postings: 1,136

Registered companies are required to produce financial statements by law. The balance sheet also reveals the economic performance of the business. A healthy financial statement may even attract parties to invest in a business. So it's no wonder that this skill is a highly sought after one in most firms.

Goals Versus Systems

What's the difference between goals and systems?

• If you're a coach, your goal is to win a championship. Your system is what your team does at practice each day.
• If you're a writer, your goal is to write a book. Your system is the writing schedule that you follow each week.
• If you're a runner, your goal is to run a marathon. Your system is your training schedule for the month.
• If you're an entrepreneur, your goal is to build a million dollar business. Your system is your sales and marketing process.

Now for the really interesting question: If you completely ignored your goals and focused only on your system, would you still get results?

For example, if you were a basketball coach and you ignored your goal to win a championship and focused only on what your team does at practice each day, would you still get results?
I think you would.

As an example, I just added up the total word count for the articles I've written this year. (You can see them all here.) In the last 12 months, I've written over 115,000 words. The typical book is about 50,000 to 60,000 words, so I have basically written two books this year.

All of this is such a surprise because I never set a goal for my writing. I didn't measure my progress in relation to some benchmark. I never set a word count goal for any particular article. I never said, "I want to write two books this year."

What I did focus on was writing one article every Monday and Thursday. And after sticking to that schedule for 11 months, the result was 115,000 words. I focused on my system and the process of doing the work. In the end, I enjoyed the same (or perhaps better) results.

1. Goals reduce your current happiness.
When you're working toward a goal, you are essentially saying, "I'm not good enough yet, but I will be when I reach my goal."

The problem with this mindset is that you're teaching yourself to always put happiness and success off until the next milestone is achieved. "Once I reach my goal, then I'll be happy. Once I achieve my goal, then I'll be successful."

SOLUTION: Commit to a process, not a goal.
Choosing a goal puts a huge burden on your shoulders. Can you imagine if I had made it my goal to write two books this year? Just writing that sentence stresses me out.

But we do this to ourselves all the time. We place unnecessary stress on ourselves to lose weight or to succeed in business or to write a best-selling novel. Instead, you can keep things simple and reduce stress by focusing on the daily process and sticking to your schedule, rather than worrying about the big, life-changing goals.

When you focus on the practice instead of the performance, you can enjoy the present moment and improve at the same time.

2: Goals are strangely at odds with long-term progress.
You might think your goal will keep you motivated over the long-term, but that's not always true.
Consider someone training for a half-marathon. Many people will work hard for months, but as soon as they finish the race, they stop training. Their goal was to finish the half-marathon and now that they have completed it, that goal is no longer there to motivate them. When all of your hard work is focused on a particular goal, what is left to push you forward after you achieve it?

This can create a type of "yo-yo effect" where people go back and forth from working on a goal to not working on one. This type of cycle makes it difficult to build upon your progress for the long-term.

SOLUTION: Release the need for immediate results.
I was training at the gym last week and I was doing my second-to-last set of clean and jerks. When I hit that rep, I felt a small twinge in my leg. It wasn't painful or an injury, just a sign of fatigue near the end of my workout. For a minute or two, I thought about doing my final set. Then, I reminded myself that I plan to do this for the rest of my life and decided to call it a day.

In a situation like the one above, a goal-based mentality will tell you to finish the workout and reach your goal. After all, if you set a goal and you don't reach it, then you feel like a failure.

But with a systems-based mentality, I had no trouble moving on. Systems-based thinking is never about hitting a particular number, it's about sticking to the process and not missing workouts.

Of course, I know that if I never miss a workout, then I will lift bigger weights in the long-run. And that's why systems are more valuable than goals. Goals are about the short-term result. Systems are about the long-term process. In the end, process always wins.

3. Goals suggest that you can control things that you have no control over.
You can't predict the future. (I know, shocking.)

But every time we set a goal, we try to do it. We try to plan out where we will be and when we will make it there. We try to predict how quickly we can make progress, even though we have no idea what circumstances or situations will arise along the way.

SOLUTION: Build feedback loops.
Each Friday, I spend 15 minutes filling out a small spreadsheet with the most critical metrics for my business. For example, in one column I calculate the conversion rate (the percentage of website visitors that join my free email newsletter each week). I rarely think about this number, but checking that column each week provides a feedback loop that tells me if I'm doing things right. When that number drops, I know that I need to send high quality traffic to my site.

Feedback loops are important for building good systems because they allow you to keep track of many different pieces without feeling the pressure to predict what is going to happen with everything. Forget about predicting the future and build a system that can signal when you need to make adjustments.

Fall In Love With Systems

None of this is to say that goals are useless. However, I've found that goals are good for planning your progress and systems are good for actually making progress.
In fact, I think I'm going to officially declare 2014 the "Year of the Sloth" so that everyone will be forced to slow down and make consistent, methodical progress rather than chasing sexy goals for a few weeks and then flaming out.

Goals can provide direction and even push you forward in the short-term, but eventually a well-designed system will always win. Having a system is what matters. Committing to the process is what makes the difference.