What Other Ways Can You Start Saving For Retirement?

 It’s never too late to start saving for retirement right? Wrong!

Studies by EPF Malaysia have shown that 50% of retirees run out of savings after five years of retirement, and only 23% of EPF members had the minimum amount of RM196,000 in EPF savings to sustain them till 75. (That’s equivalent to RM800/month for those of you who are curious or just love numbers.)

But don’t panic just yet. Because while we may have exaggerated a little in the beginning… it’s still crucial for you to start planning for retirement right now! Here are some basic financial products and services you can look out for:

Employees Provident Fund – EPF Malaysia
This is the most basic possible means of saving for retirement for most Malaysians. Trust us, it won’t be enough if you want to live comfortably without penny-pinching in your golden years. For those who want a Shariah-compliant option, EPF Malaysia will be launching its Simpanan Shariah fund in 2017.
Tip: This is a must-have and you should let the money grow so you can pursue other means of growing your retirement savings.

Private Retirement Schemes – Private Pension Administrator
Launched as an alternative retirement savings plan for Malaysians, PRS are voluntary long-term investments that are designed to complement your EPF savings. Plus there’s the added bonus of RM3,000 tax relief every year for your PRS contribution.
Tip: If you are aged between 20 -30, don’t miss out on the RM500 PRS Youth Incentive before 2018.

Fixed Deposits – Various Banks
Ever heard of the power of compound interest? Well that’s exactly what fixed deposits (FD) are meant to be used for. Some might say the interest earned is too low or it takes too long, but slow and steady wins the race.
Tip: ‘Roll over’ any interest you earn directly back into your FDs and savings account so you keep earning more interest every year.

Unit Trusts – Various Financial Service Providers
Do consider taking up Unit Trust as a great option for you to grow your savings, as they are professionally managed investment schemes which trade in a diversified portfolio of securities or assets.

Tip: Do your homework and speak to licensed financial planners to find out how to include a Unit Trust into your retirement savings plan as well as to gain expert advice. (The advice should be completely FREE until you engage their services. Don’t get taken for a ride.)

There are many ways for you to diversify your retirement savings and there is no ‘right’ or ‘wrong’ way to go about it. Let’s put it this way, the WORST financial mistake you’ll ever make is to not even save for retirement.

This article is contributed by CompareHero.my.