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a former insurance agent, says given that those who worked would have retired at 55 then, it means that many in the home have not drawn an income for 30 years or more.

“While insurance agents used to say it is easy to die, I was saying it is not easy to die so I used to talk to my clients to plan their retirement. If you had saved for 40 years while working, it will only last you 10 years because of inflation,” he says.

Rajandran suggests the government should consider allowing EPF savings to be withdrawn on an annuity form, instead of a lump sum payment.

Meanwhile, Tan says those who start working should cultivate the habit of saving, especially for an emergency fund in their earlier years. “The emergency fund can be placed in a fixed deposit account and we recommend that funds should contain three to six months of their income to survive if they are retrenched or unemployed,” he says.

Ultimately, to be financially independent, a person needs to resist the temptation to spend. For Whitman Independent Advisors Sdn Bhd founder and managing director Yap Ming Hui, this is particularly true of those who find themselves constantly spending on the latest technology gadgets.

“In a challenging situation for a fresh graduate, if they can save even RM50 a month, that will be a success as it builds up the habit to be a saver,” he adds.

Ideally, financial planners estimate that an average Malaysian should save between 10% to 30% of their salary.

“The 30% saving is not solely from the salary as 11% is contributed by EPF, so you need to save 19% from the salary. If you can save that money and invest, you will be on the path to financial freedom.” Yap says.

The spending trends of Malaysians was captured in a report by Khazanah Research Institute, which says people are borrowing too much and not saving enough.

“Planning must be done as early as possible, because it gives you the options when you plan early. When you plan later, your options are actually reduced,” Foo says.

Yap says insufficient retirement planning often boils down to the people planning having to take a long-term perspective.

“The money you earn today, it is not meant for you now. It is meant for your retirement, a lot of people miss that picture,” he says.

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