Sound financial planning crucial for all – Poll
MIRI: Having sound financial planning is still crucial for people who have retired, especially those who do not have monthly pensions.
According to the Employee Provident Fund ( EPF) 2015 Annual Report, only 958,100 – or 7.37 per cent – out of 13 million contributors had amassed more than RM150,000 by age 55. Even more shocking was that 90 per cent of rural households and 86 per cent of those in the urban areas had zero savings.
Sibuti MP Ahmad Lai Bujang is particularly concerned about this trend of those who run out of savings too soon after retiring.
“EPF was created by the government to help contributors manage their money for retirement, especially for medical cost and daily expenses. I strongly advise EPF contributors
EPF was created by the government to help contributors manage their money for retirement, especially for medical cost and daily expenses. I strongly advise EPF contributors to manage their finances well, especially those who are about to retire.
to manage their finances well, especially those who are about to retire,” he told The Borneo Post recently.
Ahmad Lai said the root of this problem was the lack of awareness among contributors of prudent planning upon the receipt of their EPF savings.
“Many have ended up wasting the money instead.”
Ahmad Lai also advised workers to refer to EPF officers for information or clarification before withdrawing their savings upon retirement.
“Should they wish to invest, they must make sure that it’s a legitimate and trustworthy. Be wary of dubious schemes that promise quick bucks – these are most likely to be scams. Moreover, seek advice from those who know the legal aspects of investing,” he said.
Adding on, political secretary to chief minister Sarkawi Suhaili advised the people against investing their money in schemes that seemed ‘ too good to be true’.
“When one scheme fails, another would emerge – many people still invest in it, despite the repeated warnings. I’ve seen people who still have ongoing house loans apply for renewed loans and as a result, they remain forever in debt.
“What’s worse is that they end up going to loan sharks, who would go after their EPF money as well,” he said.
Sarkawi also advised those wishing to start a business using their EPF savings to be wellversed in the kind of venture that they were about to embark on.
Meanwhile, wealth management advisor Ermizam Norudin encouraged those new to financial planning to start small by buying valid and less- risky insurance, ‘ takaful’ and unit trusts.
Ideally, she advocated for them to start young.
“In this regard, you can join any valid private retirement scheme because the younger you are, the smaller the amount of monthly deductions that you need to commit to.
“One should not depend on EPF alone – you must look for other legitimate products like private investment schemes or invest in ASB (Amanah Saham Bumiputera). Everybody must have reliable strategies in managing finances,” she said.
Ahmad Lai Bujang, Sibuti MP