Are you ready to retire Young & Rich?

Has this ever crossed your mind? Your response? Look no further, the answer is right staring within you. Logically speaking? Well, let’s give this test a go shall we, How long will my retirement savings last? Say you want to retire at 40, and you’re projected to live until 70. To make more mathematical sense:

Expected number of years of retirement = 70 - 40 = 30 years!!!

Now, are you happy with your result?

Let’s face bigger questions:

1) Is our savings & KWSP sufficient ? (NB/ this calculation not even consider medical expenses at that age –especially if we do not own any medical insurance. But even if we do, do we know how much is our country inflation rate for medical expenses?)

2) Is our investment vehicle doing good enough? What investment vehicle to use so that our money will not be swiped away (in value sense) by inflation?

3) Are we satisfied with the recommended withdrawal amount (say it is monthly basis withdrawal)?. Should the value proposed lower than our expected monthly expenses (after inflation is being factored in of coz!!), are we willing to lower our standard of living?

I cringe every time I hear people say ‘bestnye kalau aku menang sejuta, kaya aku, takyah keje dah sampai bile-bile’. Can a windfall really change people’s lives? EPF officials have been quoted saying that people who withdraw their savings in a lump sum upon reaching the age of 55, tend to spend their savings off in 3 years!.