Thursday, August 14, 2008

Majority Neglect Retirement Plans

According to a recent survey, AXA Retirement Scope 2008, more than half of Malaysian workers have not prepared for retirement while those who have, only started planning after age 40. (Yeah, life begins at 40 but don’t you think it’s way too late to build our retirement fund?)

The survey, part of a global study conducted in 26 countries, involving 18,000 respondents, was undertaken from July 23 to Aug 27, 2007.

Among those who had planned for retirement, most began after they married, had children, fell into financial difficulties or had health problems.(Me - tick on all the above except health problem).

Their sources of retirement income included life insurance, Employees Provident Fund and personal savings.(Me - tick on all above plus real properties, shares and unit trusts).

The retired saved an average of RM478 a month and the working RM704, figures that were considered low compared with other countries. The retired feel that their retirement income is insufficient to cover household expenses. The average income is RM1,243 but the amount needed is RM1,568 – a deficit of RM325.

In comparison, Singapore’s average retirement income is RM3,690 and the amount needed RM3,465; while Thailand’s average income is RM1,276 and the amount needed RM903. (that's the way to count!)

The disparity between high and low income earners in Malaysia is wide, the high-income retirees having four times more than those with low income. (Yeah, rich become richer, poor become poorer?). Despite insufficient income, three-quarters of the retirees said their quality of life had improved if not remaining the same, while 83% of the working group expect their quality of life to improve or remain the same. (possible but be very wary of the inflation rate!).

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