Retiree Suffering

Last few weeks, I've came across some local newspapers about money and retirement. There is statistic showing that over the last few decades, retirees are facing problems regarding finance after they retired.

There are lots of reasons for it. Let's see...

Firstly, our children's education.

By the time we retire, we probably had already sent our children to university or college. As we all know, universities or colleges education fees aren't cheap. This may include the tuition fees, accommodations, transport, food and social, etc...

If you are Malaysian, you might think of the Employees Provident Fund (EPF or KWSP). Before proceeding to EPF, one must fully understand the situation in EPF. Is the amount sufficient to cater the need of your child? Or do you realize that you have more than a child to send to college or university? Or are you planning to send only ONE?

EPF might only enough for a child's education. Beware on that because it depends on your monthly salary. How about the second child? Own funding? Part time learner? Or would you want them to suffer by applying loan which in the future they might be struggling to repay the loan? How would they be able to feed retiree if they have a debt to pay?

Lets say if by that time, your money is enough for both children, and for sure not enough for your own retirement? Retirees have to plant their own paddy and rear their own goats by that time? Are you kidding me???

A big portion of money will be spent on these youngsters in their education and as a retiree; we can only hope for them to feed us after that.

Now, does this policy of younger generation feeding elder generations work?

Lots of graduates couldn't even feed themselves after graduated due to lots of unseen reason like economics, job vacancies, result and so on.

So after this amount of money paying out to the children, do we still have enough money to live our own life or we still need to struggle for money even until the last day of our life?

Secondly, do not have a proper and feasible and applicable financial planning.

Wait a minute, why feasible? As according to some experts, emergency money should equals to a total of six months’ salary of a person. Example, Mr. A is having a paid job of RM 1,000.00. This means, he should have RM 6,000.00 in account to be very liquid (able to withdraw anytime) in case of emergency. Emergency can include surgery fees, emergency forgotten debt that dues, accidents and etc.

So how does financial planning works. If we plan from young what advantage and disadvantage we’ll have? Lets see…

From the advantage, we’ll be able to declare full financial freedom by shopping around and at the same time sending our children to universities and colleges overseas even during economic recessions. By that time, people will look at you as a rich guy and robbery case might increase because of you. Haha..funny.

The only disadvantage is we’ll need to do our so called “homework” everyday and months by reviewing the plan and target and at the same time controlling our expenditure.

Thirdly, do not comply with financial planning as planned.

Plan is there. But if we do not comply with it, its equals to no plan.

Fourthly, debt avoidance.

You might envy why certain people with average salary could drive branded cars or buy expensive bungalows. Do not panic, do not worry. The most importantly, do not feel guilty of not able to provide your wife the same thing. Why? Why? And Why?

Its very simple, they might have lots of debt around their waist (hutang keliling pinggang – in Malay Language). Why is it not good to have debts? Debt will cause you extra with the interest rate. Example, a car you bought at RM 50,000.00, might cost you RM 60,000.00 after you fully pay all the installment plus interest. Be reminded of that you will still poor but having a branded car and bungalow only but nothing else. Other might have waited and pay RM 50,000.00 only and use the extra RM 10,000.00 to invest in other things.

Fifthly. There are reasons for not planning out a finance plan.

People thought they do not have income or very little income or not enough money to plan for in their life.

Do you think only people with income needs to plan financially? If you think so, you are totally, absolutely and definitely WRONG!!!! Again, why? Rich people, they probably do not need to plan anymore as they have already reached financial freedom to buy anything they want. If we are short of money, we have to be extremely extra careful of that portion money already. Am I right? We wouldn’t want to lose that portion of money for something worthless. So as small conclusion, don’t ever give excuse for not to plan your finance. Even your income is only RM 2.00 per day.

So as overall conclusion my dear friends, since we’re still young, why don’t spend less and plan for your future starting right now?