4 Reasons to Start Saving for Retirement While You’re Young


Don’t wait until you’re older to realise the importance of saving, especially for those important years in retirement.


You may be embarking on your first career with a host of bright opportunities ahead of you, or probably you are already adjusting into the 9 to 5 career life, slowly learning the tricks of the trade in your respective field of work.

After working hours or during weekends, you enjoy hanging out with friends, checking out the latest gadgets or discovering new eateries. Like most millennials, you want to enjoy all these and other pleasantries of life well into your retirement years.

A survey by the Asian Institute of Finance (AIF) in 2015 found that Gen-Y and millennials are savvy when it comes to using technological equipment but not on financial matters, resulting in 40 per cent splurging on purchases while close to 70 per cent live beyond their means.

The consolation is that the same survey found that many young working adults save a portion of their monthly income, with 54 per cent saying that they save at least 20 per cent of their salary.

The survey further revealed that the tendency to save increases as they grow older with the highest percentage of savers i.e. 57 per cent comprising those being between ages of 27 to 33 years.

The thing is you don’t have to wait until you’re older to realise the importance of saving, especially saving for those important years in retirement. Getting an early start in saving for your retirement will greatly impact your future lifestyle and standard of living.

Here are 4 reasons why it is a smart move to do so:

  • Financial independence

One of the most liberating things is to have financial independence when you retire, where you would have adequate savings to cover all your expenses, including your basic necessities and lifestyle expenses, discretionary items as well as the occasional indulgences.

This is the stage when the money you have invested and saved provides you enough of a return to support your living standards without being dependent on anyone.

By saving as well as investing money from an early age, it gives you about 30 to 40 years of compound growth benefit, which helps you towards becoming financially independent with the accumulated savings in your retirement.

  • Saving is a good habit

You may not realise this but forming good habits on spending and saving is important when we first start working.

As the popular saying goes “we first make our habits and then our habits make us”, the way you manage your monthly pay checks could determine how you save for the rest of your earning years as it becomes an accustomed lifestyle and pattern of living.

The Private Pension Administrator (PPA) Malaysia, the central administrator for the voluntary retirement scheme – the Private Retirement Schemes (PRS) – recommends young Malaysians to start saving a minimum 10% of their monthly income into PRS for future spending in retirement.

Starting small helps as it makes it manageable and not too overwhelming for young adults who are just venturing out into the workforce.

Furthermore, this action of “paying forward”, if done consistently will over time become an entrenched habit which is good for you now, as well as takes care of the future YOU later!

  • Control over your future

Making it a point to set aside savings for your retirement now and doing it consistently gives you control over the course of your future, as you are in an actual sense preparing financially for your future.

Having sufficient financial savings gives you confidence to enjoy your current lifestyle even in retirement without being a burden to anyone in your old age.

This way, you could also pursue and enjoy your passions and other things in life when you retire. You owe it to yourself to save for your retirement as it is after all YOUR future, no one else will be doing that for you.

  • RM1,000 PRS Youth Incentive

Now, this is a perk if you are a young adult between the ages of 20 to 30 years in Malaysia. The government gives you a matching RM1,000 when you contribute a minimum of RM1,000 within the two (2) year period of 2017 to  2018 in your PRS fund for your retirement.

That’s an extra RM1,000 which will be converted into PRS fund units that you are getting to kick start your retirement savings. Awesome!

Besides that, if you are gainfully employed and paying your taxes, you also benefit from the PRS tax relief of up to RM3,000 annually. Double joy!

Now you have it! 4 reasons to say YES to start saving early for your retirement. Open your PRS account, start small and gradually increase the amount of contributions as your income increases over time. So, make a lasting impression on your future and start saving for your retirement today.

Source: Private Pension Administrator (PPA) Malaysia. PPA is the Central Administrator for the Private Retirement Schemes (PRS).


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