How to best prepare your finances for your future

With the rising costs of living, our tumbling ringgit and the unhealthy levels of haze across Malaysia, being financially secure enough to enjoy your life in retirement might not one of the top priorities at the moment. However, Malaysia is forecasted to become an aged nation by 2030 i.e. when the elderly accounts for 15% of total population. The number of people aged 60 and above in Malaysia continues to rise and one day that will be you!


One of the most common questions surrounding this topic is ‘how much do I need to put aside for a comfortable retirement?’ There is no simple answer to this question as there are many factors that will affect the amount you ultimately end up saving:

  • Your savings rate
  • The rate of return
  • The number of years you will spend in retirement


….but most importantly, how many years of work you have remaining. Anticipating your future needs and wants, and predicting your future income will stand you in good stead for your old age if done sooner rather than later.

If you are in your 20s or 30s…

Start saving now:

Many people don’t start thinking about saving or investing for their retirement until after middle age, by which they’ve already missed the opportunity to let their savings grow over time. Begin saving early in your career so that you don’t have to save as much later to reach your retirement goal.



Project how much you need to save:

There are many online calculators that can help you project how much you should save for your retirement. After you’ve determined a savings goal, you need to make sure that your retirement contributions and investment portfolio growth will help you achieve your goal, not forgetting the effects of inflation.

Review your portfolio frequently and adjust your investment strategies if needed:

Your growth investments might include mutual funds. Make sure you look at performance history to project if the returns can meet your goals. You also need to review your portfolio at a reasonable frequency to determine if you are on track. Adjust your portfolio to make sure that your plan is properly diversified.

If you are in your 40s or 50s…

Downsize your home:

After your children have moved out after graduating or getting married, downsizing your home can help free up a lot of money, as well as cutting down the monthly expenses to save for retirement. If you can use the equity in your larger home for a significant down payment on new home, you can greatly reduce your monthly mortgage payments.

Refinance your mortgage:

If you decide to stay in your current home, consider getting a smaller mortgage by refinancing. Many homeowners who have had the same mortgage for years are surprised at how much lower their payments become once they refinance their loan.

Begin moving your money towards more stable investments:

Begin shifting some of your money out of riskier investments and toward safer investment opportunities. Move out from the stock market that may not produce predictable yearly returns and put some of your savings into investment grade bonds or annuities.



Whatever your age, make sure you are adequately insured:

Don’t assume that you can work as long as you want, and don’t assume that you’ll spend all your working years financially active. It is quite possible that you may be temporarily out of job, or that an injury or accident will erode many of your savings as you pay for medical bills to restore your health and physical well-being. Your retirement plan may be completely affected.  So making sure you have adequate insurance coverage is a golden rule in taking care of your finances for the future.

With that in mind the best way to prepare your finances for the future is by is by arranging affordable personal accident protection for you and your family with the EZTakaful app.



Download the free app now to learn more about EZTakaful and cover everyone you love!

Next week the EZTakaful blog will be discussing the best ways to protect yourself against deception, identity theft and invasion when shopping online.

Happy Reading!

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