Monday, December 20, 2010

Retiring Well Holistically

When Malaysians think of retirement, the first thing that comes to mind is how they will survive it financially.

At a two-day conference organised by the Financial Planning Association of Malaysia (FPAM) entitled " How to Retire Well", one of the speakers at the panel discussion, Rajen Devadason, a financial planner said that from his experience and calculation, 90% of urban Malaysians would require between RM500,000 and RM5 million to retire.

"Retiring well doesn't jusy mean starting the retirement [phase] with a reservoir in place but with many streams of passive income such as dividend income. Focus on passive income, identify your passion and enjoy your passage of days," he said.

How does an average middleclass individual living in an urban area today retire with that amount of money? He said it is hard but not impossible. " He has to ensure that he restructures his life so that he is not held ransom by a corporation that tells him that he has to retire at 55. [Also] I've made no bones about this. I've run the numbers again and again. I can't see how people can cheat their numbers unless they advocate a 40% to 50% net saving rate."

"I drivenan 18-year-old, third hand Proton Saga with about 674,000km on the clock and while I own Astro shares, I don't have Astro at home. I am very extreme in that regard but it is possible? Yes it is, but not if you try and keep up with the Joneses," he added.

Retiring well also means retiring well from holistic point of view. Fellow Panallist Professor Low Wah Yun, professor of psychology at the Faculty of Medicine at University of Malaya, said to enjoy retirement fully, one has to take care of one's physical health. "We live in a materialistic society in which we're never satisfied and we will always want something more, like a bigger car. My point is to look at your lifestyle. Is money everything to retirement? Don't look at it in ringgit and sen. What about physical and psyhological health?"

To handle those things, keep yourself as active as possible. If you have it, use it, or you will lose it.

by Tho Li Ming

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