Ever thought about what it would be like to retire early? To achieve financial freedom and support your lifestyle without having to work? In actuality, it’s not an impossible feat. All it takes is a little bit of planning, some forward thinking and of course, plenty of discipline.

Now take a few minutes to calculate your ideal retirement savings. Having an idea of your financial landscape will help you determine the right investment plan. Don’t forget, planning a retirement at 40 means you have 25 years less to save compared to retiring at 65. 

 

Once you’ve done the math, you may realise relying on your EPF alone won’t be enough to ensure financial independence after retirement. Especially with the ever-increasing cost of living, economic inflation and the occasional unexpected expenses, there will be very little left to fully enjoy retirement.

 

What you need is an immediate savings goal – the earlier you start, the more you’ll have by the time you’re ready to retire. Although you may have a well-calculated plan in mind, it’s always best to aim higher. After all, retiring at 40 means you’re still able and fit to embark on bigger and more exciting adventures.

Pay yourself, not just your bills

Setting aside at least 20% of your monthly income is a good start and prevents impulse spending. Park it into a higher returns savings account or look to fixed-price funds like Amanah Saham Malaysia (ASM) which pay consistent annual, non-taxable, no-sales-charge dividends.
 

Learn more about how to capitalise on ASNB funds here.

Consider Additional Investments

While you may already be on the right track to a financially independent retirement, there are a host of opportunities to consider without compromising on needs and lifestyle:

 

  • Private Retirement Schemes (PRS)
    These are private-company-managed schemes. Similar to the Employees Provident Fund (EPF), they run on the same principal of savings. If you can afford it, you may invest in multiple PRS accounts. The benefit? Receivable earnings when you withdraw at retirement. 

  • Investment-linked Insurance
    Beyond preparing for you and your loved ones for the unexpected, there are insurance plans that combine protection and investment. These offer the flexibility of dividing your premiums into insurance protection and investment funds.

  • Unit Trusts
    Another popular option, unit trusts have the potential to deliver higher returns compared to traditional savings plans. You may diversify your investment portfolio as you gain exposure into professionally managed investment opportunities in local, regional and global markets.
     

Finally, explore opportunities that create passive income streams to supplement your income and boost your savings. These are ventures requiring minimal effort and upkeep, yet able to earn meaningful returns to boost your retirement kitty.
 

Speak to a financial adviser for more nest egg opportunities so you can look forward to retiring restfully, happily and comfortably.

 

 

This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve all our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.