It is a fact that many retirees are struggling to cope with their living expenses. A survey carried out by the Employees Provident Fund (EPF)in 2004 showed that 99.9% of contributors withdraw all their savings in one lump sum after they retire at 55. 70% of them deplete their EPF savings within three years of withdrawing the money. Given the average life expectancy of 75, how are these retirees going to support themselves for the next 20-30 years?
A recent article in The Star suggests that Malaysians need to have at least a million ringgit in cash reserves upon retirement to enjoy the lifestyle they are accustomed to before they retired. RM1,000,000 is a lot of money. How many of us have that kind of money saved?
Source: The Star. Click here to read more.
We can’t expect our adult children to support us indefinitely. They have their own financial commitments to deal with. The best way to help them is to be able to support ourselves. So can we afford to retire? Absolutely NO. But do we have a choice when the mandatory retirement age is 58, even though this has been raised from 55? How many companies will hire us at 58 even if we are able to work and contribute?
So the daily struggle continues. The fortunate ones are those who have planned well ahead for their retirement, have money to invest in shares or have generous children to fall back on. For the rest of us, it’s a case of no money coming in, but much money going out.
Retirees need to spend on food, dietary supplements, medicine, transport, utilities, mortgage payments and insurance premiums. The situation is compounded if they have elderly parents to care for, or children to see through college or university.
Depending on the lifestyle a retiree would want to maintain, whether he has any dependents to support, and whether he lives in the city or small town, he would need anything from RM500 to RM2000 a month to survive on. The numbers are a conservative estimate.
The bottom line is this: Retirees just can't afford to retire. They can’t even afford to get sick, considering the hefty costs of health care and hospitalization. Those on government pension may have access to free medical and dental benefits, but there are millions more who are left in the cold to fend for themselves.
Singapore plans to raise the retirement age to 65 in 2012, and eventually to 67. Britain is considering scrapping the compulsory retirement age. Elsewhere the trend is towards extending the retirement age to enable older workers to continue supporting themselves, and not be a financial burden to their children.
Of course, if you are a billionaire in Asia, you can choose to retire and enjoy the fruits of your labour. Or continue working and make more money faster than you can spend it. Now that would be every retiree's pipe dream.
Financial education should start in school, as an integral part of the Living Skills curriculum. To go one step further, the government, in collaboration with the private sector, should consider issuing a senior citizen card for those who are eligible. This card would enable them to enjoy free or discounted fares, healthcare, basic food essentials, pharmaceuticals, and other elderly-related services and products.
I know of a pharmacy and a food chain that issue a special discount card for seniors. Kudos to them. However, there shouldn't be too many terms and conditions attached for card-holders. Otherwise it defeats the purpose of helping them. Also, it makes more sense to have a all-in-one privilege card. It can be quite cumbersome to carry a dozen discount cards in my wallet each time I go out.
It’s high time the welfare of our senior citizens be given priority, and not just token attention every now and then. We have been an overlooked and neglected lot for much too long.
4 comments:
It is sad that there are so many senoirs in our own country who have no money to sustain them in their twilight years. The figures that are available are out-of-date and, I dare say, many are not very representative. Samples of these surveys were not representative of those in the rural areas and many of those who are illiterate. So, in fact the numbers may be worse.
Even those seniors who have saved and have a decent nest also live in fear. They fear their health will not fail them. If medical care is required these nests they have built may be substaially wiped out, if not totally wiped out.
This precarious situation arises because we were not very saving-conscious in our productive years. Of course, those making just enough to meet thier needs can be exempted from this description. But many of us have more than necessary to meet our needs, we just failed to contemple enough, we failed to save enough.
As senoirs, teaching younger people to save for old age should be one of our responsibility.
You are right. The situation has certainly worsened with the current economic downturn.
We should pass on the lesson learned to the younger generation and pray they have the sense to see the wisdom in saving adequately NOW for their future retirement.
The soaring costs of health care means we can't even afford to be sick!
Financial education should start in school, as an integral part of the Living Skills course.
A very good idea, only if the govt. will structure something along this line into the education of the young children.
Sorry, spotted 2 mistaken in my earlier posting ...
* '...fear their health will fail them' and not as posted.
* 'substantially' and not 'substaially'.
Investing in student accommodation investment is good because of excellent fundamentals of low vacancy rate and high income. The potential of investment rental property in the UK is fully explored.
Post a Comment