Why Malaysians today does not have enough money for retirement??

Summarized by : SITI KHATIJAH BINTI JAMIL

Everyone should take into considerations about their retirement planning today because certain life decisions that we make now, decisions that we make today will definitely affect our situation at old age or retirement phase. As we can see today, for some people their retirement is just not enough to sustain them. Of course bad or no planning could be one of the primary factors as well.
The problem of not having enough money during retirement phase arises as result of many factors. One of them is longevity. People are living longer with the life expectancy about 70 to 85 years. Means that, after retirement people are still having more than 20 years to support their lives. Hence, as a result do not start early for their retirement, they are going to find themselves in a spot after they turn to 55. Then, facing a retirement is a challenge to them.
Marrying late also resulted people do not have sufficient money during their retirement age. For example if a person has a kid at the age of 35 and retires at 55, he still need to support for his children at 20 that may still at the university or college and his education require financing. Thus, parents are willing to give up “everything”, including their own retirement fund for the kids and leave them in a vulnerable position in their old age, unless of course their children provide for them after that.
As people grow older, they might runs into some health problem. It will be more painful as they do not have insurance policy to cover for the medical expenses. This result them to use a portion from their retirement fund (which already not enough for their retirement) to pay for the medical expenses. And people should realize that medical expenses are tending to be increase from year to year.
Individual lifestyles also contribute to insufficient retirement fund during the old age. Purchasing big assets like property or a house late in life as the danger is that once they have retired they may not be able to meet the installment payment on it. It is suggested for us to start winding down and not committing to high expenses to buy big thing once you are in late 40’s unless you have plan it well.
Inflation also affects the retirement fund. The RM 1000 at the 10 years ago does not same as RM 1000 when you are retired. Inflation has result the cost of living increase from year to year. For the retirees, this result those to spend more to support their cost of living indirectly result their retirement fund insufficient throughout the retirement phase.
Insufficient retirement benefits also arise as people are not saving or building their retirement nest. This could be seen as a major factor as people only depending to their retirement benefit to support their retirement phase. Therefore, people should motivate themselves to start saving during the early ages and they can enjoy the magic of the compounding effect during their retirement.