Bits & Bites #143 - Success: 7 Mistakes People Make in Retirement Planning

Sunday, 26 June 2016

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Grand Kingdom
Do you have a clear Goal of what you want to achieve in your business? 
Do you write down your goal?
How can you do a business without knowing how much you need to earn to breakeven? 
If you don't have a clear written plan, you won't achieve your goal.

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Having a Goal makes you feel grounded. You know what you want. This can be perceived and felt by people around you.
You will attract quality people to follow you.

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Seven Mistakes People Make in Retirement Planning

1. No plan
a) Have you calculated how much you need to save in order to retire?
b) Have you committed to a regular savings goal?
c) Do you have a step-by-step action plan on how to achieve your goal?

2. Not saving enough
If you spend RM10 a day on a cup of "fancy coffee", over 30 years, you would have spent RM109,500. If this amount is compounded at 10% p.a., this amount would be in the region of over RM600k.
Recommendation: Save at least 30% of your income (including EPF).

3. Don't start saving early enough
In your 20s, you say you're too young to think about savings.
In your 30s and 40s, you have too many commitments and expenses to save.
In your 50s, you're retired already or too sick to save.
So, Procrastination is a very painful and expensive mistake.

4. Inaccurate retirement income   
If it's set too High, it's difficult to achieve.
If it's set too Low, you won't be able to achieve your goal.
Recommendation: Estimate your monthly expenses to be at least two-thirds of your last drawn salary.

5. Disregarding higher healthcare cost
Don't only plan for normal daily expenses. Remember to include costs that will be incurred when you fall sick.

6. No long-term healthcare plan
If we're very sick, we may opt for nursing care at the last stage of our lives to avoid burdening our family. Currently, this costs RM1,000-RM5,000 / month.

7. Not updating your retirement plan
Different events happen at different stages in life. Revisit your plan at least once every 5 years.

Most people spend a lot of energy and time to plan for their vacation, new house, children's education etc. But they forget to plan for their own retirement.
Don't make the same mistake.


Dao Xiang

This post is part of a weekly series sharing Bits of mishmash on health, my business and life in general, which I find inspirational, enlightening or enriching. And Bites of delicious food I have enjoyed.

Drop me a mail at askfuiping@gmail.com if you want more tips on how to successfully achieve your goals.


Have an awesome day!