MOST people are aware of the importance of having a retirement plan through saving and investments.
Many, however, do not know how much they need for retirement and do not have a proper saving and investment plans that caters for their retirement.
We aspire to achieve many goals in our lives. Besides savings for our own self, we create funding for other purposes – especially for our family members such as our children’s education, travelling, buying properties, funding for parents’ living expenses, among others.
Without proper saving and investment plans, we might have a tendency of mixing up the usage of the funds; only to realise at a later stage of life that our retirement funding is not sufficient to cater for our own retirement needs.
Many people prefer to go with their own flow when managing their cash flow – without intentionally putting any effort into any plans.
Some even ‘scout around’ by listening to all sorts of hearsay on savings and investment tools available in the market. There are also those who explore new trending investments that they are not familiar with. All of them, however, could be losing their savings or jeopardise their retirement without properly planning.
Useful tips
Here are some tips on how to start your retirement plan once you have determined the retirement fund that you need (you may refer to Part 1 of our article for more details):
Firstly, write down your retirement goals. Nothing becomes dynamic until it is specific.
Next, make your goals visible and do not let them out of sight. Make a retirement dream board with nice visuals that motivate you to continue your saving and investment journey.
Thirdly, identify barriers that could deter you from achieving your retirement plan through your savings and investments. When you anticipate potential barriers which could incur additional funding, you need to set up an emergency fund so that the saving and investment plans for your retirement will not be affected.
Seek professional and trustable advice to show you the steps to take for saving and investment. The larger the goal is, the more steps you need to take. Always refer to the right source of information. Engage a licensed financial adviser as your coach to walk you through your retirement planning journey.
Pen down and keep track on your investment portfolios. Compartmentalise your investment portfolios to cater for different goals. The best way to maximise your investment opportunities is to diversify your investment and meet regularly with your financial adviser to review and re-balance your portfolio.
Meanwhile, we need to realise that mis-steps or mistakes are how we learn and grow. You may have unpleasant investment experiences in the past but this should not be a hindrance to your retirement planning.
Lastly, take baby steps every day because every step counts. It is never too late to start planning by leveraging the power of time and the wonder of compounding interest.
Commitment is the name of the game. We can have many goals but always remember our retirement goal is for our own self. It is really the greatest act of self-care you can do. You reap what you sow. – June 26, 2022
Vivian Chow, CFP is a certified member of the Financial Planning Association of Malaysia (FPAM) and also a licensed financial planner with FA Advisory Sdn Bhd.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
