Losing weight or staying fit and healthy often surfaces as one of the top New Year resolutions universally no matter which corner of the world you are in as everyone wishes to see a fitter and healthier version of themselves with each passing year.
While physical health is definitely an important area that we should look after every year, your future financial health deserves to take precedence as one of your top priorities for this New Year.
Since a New Year presents us with a clean slate of things to start new ventures and chart new directions, why not do something good for your future self by making it a goal to start saving for your retirement in 2017?
During the International Social Security Conference 2016, Bank Negara Malaysia revealed up to 92% of Malaysians worry over their financial health and needs at old age as well as being unprepared for retirement.
In this regard, it pays to be in the minority 8% category as you are most probably looking forward to enjoying your retirement years with sufficient financial resources to do the things you want. You may be from the private sector or public service with existing retirement savings, or you could even be a self-employed person, running your own business.
Whichever one it may be, there would be a point in time when you actively stop earning an income and withdraw totally from employment. This is the part when you would expect your accumulated savings throughout your earning years to do the work of providing you the means to fund your lifestyle for the rest of your life.
What can you do differently this New Year to ‘add on’ to the accumulated savings or if you have yet to have any pool of savings, to start one and help prepare yourself for that period of time?
You can contribute into a savings and investment scheme designed for retirement such as the Private Retirement Schemes (PRS). With PRS, all Malaysians, whether employed or self-employed could voluntarily supplement their retirement savings under a well-structured and regulated environment.
Each PRS offers a choice of retirement funds from which individuals may choose to invest in based on their own retirement needs, goals and risk appetite.
How to go about it with the PRS? It is fairly simple to start your PRS account. In fact, it could be summed up in just four (4) steps:
Select your PRS Provider
The PRS are offered by PRS Providers who are approved by the Securities Commission Malaysia. There are currently eight (8) PRS Providers offering the PRS and you may choose to contribute to one (1) or more PRS Providers.
Choose a suitable PRS Fund
Under each PRS Provider, you can further choose to invest into one (1) or more funds by either contributing based on the default option for core funds (age-based selection of funds) or select a fund based on your preferred choice.
Make regular monthly contributions
Consistent contributions to your PRS account will enhance the growth of your retirement funds as it taps on the power of compounding on your contributions over time. It is recommended that you start contributing a minimum of 10% of your monthly income into PRS and set it aside for your future spending in retirement.
Top up with PRS Online
Once you have started your PRS account, you can continue making regular monthly contributions into your PRS funds with PRS Online, an online service which enables PRS Members an easy, convenient and secure way to make additional contributions into their PRS funds. This makes it easier for you to commit to this new resolution of saving more for your retirement as you can top up your PRS funds, anytime and anywhere.
It pays to have more than just one (1) source of retirement savings pot as there could be unexpected expenses even in retirement and we are all aware that the more you have, the better you are at “ring-fencing” your retirement savings from external factors such as the rising cost of living and the effects of inflation.
So, this new year, initiate the first step of opening a PRS account and steadily save more as the year progresses to enjoy a more comfortable and fulfilling retirement in the future.
Source: Private Pension Administrator Malaysia (PPA). PPA is the Central Administrator for the Private Retirement Schemes (PRS).