Getting started on retirement planning

Regardless of your age, you'll be be able to picture your ideal retirement lifestyle.

Retirement is something personal. Your ideal retirement lifestyle might be different from others. Being able to achieve a comfortable retirement is probably one of your top priorities as you age.

The purpose of retirement planning

Retirement savings – how much will you need? 

Retirement calculators to estimate savings goals

How to contribute to your retirement portfolio

3 key points to keep in mind when retirement planning 

Retirement planning is essential to ensure that you have the financial resources needed to enjoy a comfortable and worry-free retirement. The earlier you begin your retirement planning, the better prepared you will be for the future.

Taking advantage of the benefit of compound interest could be a start. When you invest early, your money has more time to grow. The returns earned on your investments will then begin to generate their own earnings. This compounding effect can significantly increase the size of your retirement fund.

Early planning also helps you to avoid any large and aggressive contributions later in life. By starting your retirement planning early, you set yourself up for financial success and peace of mind. This will allow you to enjoy a comfortable and secure retirement without financial worries.

How much you'll need depends on many factors. Ask yourself:

You'll also need to consider the inflation rate and your dependents, including children, parents and siblings.

You can estimate your retirement needs using a few simple steps.

Let's assume you're fit and healthy. You plan to retire at the age of 65 when your last drawn salary, after tax at your retirement age, is RM50,000. Several members of your family lived into their 90s, so you might need an income for 30 years. Saving two-thirds (66%) of your income, your retirement goal is:

[Current salary after tax x 66% x Number of years = Savings goal]

RM50,000 x 66% x 30 = RM990,600

Try an online retirement calculator to see how much you'll need to save for retirement. 

The earlier you start saving, the larger your retirement goal will be. That's because the longer you save, the more the interest you earn compounds, which is when you earn interest not only on your savings, but also on the accumulated interest you've already earned. This interest on your interest is called compound interest.

You may be entitled to a government or state pension. However, you should plan to supplement these with savings and investments of your own. This is because the terms and/or laws guiding government pensions are subject to political, economic, and other factors.

Some employers may offer 'contribution matching', which is when they agree to make additional contributions into your retirement savings, as long as you agree to increase your contributions as well.