Retirement: Winners and losers will emerge as the clock ticks

IN  a few years, we will have brought the SARS-CoV2 virus and its associated COVID-19 disease (and its proliferating variants) to heel. Sadly, we face a more pervasive, stubborn and sticky future challenge – underfunded retirement periods in the 2030s and beyond.

Malaysians in general would be in far worse shape than we are today if not for our wisely-established Employees Provident Fund (EPF) which has been paying out dividends every year since 1952.

The mandatory forced savings for employees that flow into EPF throughout our multi-decade working careers provide a much needed safety net for millions of us.

Unfortunately, there are millions of other Malaysians who don’t contribute to EPF because they aren’t required to!

Either way, almost all of us need more than our EPF funds to thrive in our eventual retirement years.

Rajen Devadason

So, regardless of whether you possess a funded EPF account or not, you must accept additional personal responsibility for your own future by following this ancient, unfailing formula for financial health, vigour and success:

Spend less than you earn, save and invest the difference, and do so for a long time.

As a licensed financial planner who has run his own practice for more than 20 years, I have learnt to identify those who are likely to fail and those who are prone to succeed in this most vital of economic endeavours.

Those who crash and burn typically don’t appreciate the urgency of preparing well for retirement when they are young.

Instead, they embrace a culture of immediate gratification and, thus, either spend all they make each month or, worse yet, spend more than they earn and thus use credit cards and other debt instruments to make up their fiscal shortfall.

Acting in this manner for too long dooms them to old age poverty.

In contrast, life’s economic winners – disregarding the big-time business successes at the far end of Earth’s normal distribution curve for personal wealth – do start saving and investing early.

They are able to do so, usually, by heeding a written budget that guides them toward generating cash flow surpluses each month.

Those cash surpluses are saved and invested to generate capital gains in the early decades of their journey toward financial freedom and healthy streams of passive income later on in retirement.

Each of us owes it to ourselves and our families to take personal responsibility for our self-education in matters pertaining to economics, business, investing and, most certainly, financial planning.


The clock’s ticking and we don’t want to squander our prime working years by not fully funding our golden retirement nest egg. – Aug 29, 2021


Rajen Devadason, CFP, is a Licensed Financial Planner, professional speaker and author. He is also the CEO of RD WealthCreation Sdn Bhd.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.


Photo credit: iStock

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