Smart Investor Malaysia

Legacy Planning – It’s Now or Never!

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Legacy planning. Estate planning. Succession planning.

What do all these phrases mean? Am I too young or is it too early to consider such plans?

Life as we know it, does not always go according to plan. For example, an unexpected pandemic may have forced a career change on you. Suddenly, you need to dip into your retirement fund for some emergency funds – which would leave you with a depleted income when you reach the age of retirement.

What is more worrying is that when your business encounters financial trouble, it leads to more money being pumped from your retirement fund into the business. Would your retirement plan that was created a decade ago still be sufficient? Would you still be able to leave a legacy for your family and protect them from uncertainties in life? Unlikely.

It is common for us to think of investment and insurance after settling down, but what about legacy creation and why is it important?

Legacy planning

Legacy planning takes on many meanings for different people. However, the focus remains – will I have a lasting and positive impact on the lives of my loved ones? While some have given some consideration to their legacy, most have never put it in writing, and even fewer have established a plan of action.

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As a doting provider, you would want your family to inherit the fruits of your labour and ensure that they will always be well looked after especially in later years. With legacy planning, it allows you to pass on what is most important to your loved ones without compromising your current and future lifestyle.

With adequate legacy planning, you will be able to increase your estate, enjoy greater liquidity and ensure fair distribution should any unforeseen circumstances occur while benefiting from financial freedom in your golden years.

Estate equalisation and succession planning

For those who own a family business, one of the challenges is figuring out how to pass on the business to the next generation, especially when one child participates in the business and the other does not.

While you want to leave a good legacy for your family, you would also like to ensure that the inheritance is fairly distributed to maintain the peace and harmony of the family. With fair distribution it can help to mitigate family problems which may arise when the distribution of an estate appears unevenly allocated.

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If your wealth changes your life for the better, you are successful. If your wealth changes others’ lives for the better, you have created a legacy. What legacy will you leave behind? When is the right time for such commitment? The answer is now or the sooner the better. However, there are a few things to be considered such as:

1. How much do you want to invest?

Are you looking to invest a lump sum, or set aside a regular monthly amount? And how much money do you – make available for investment? Is this your emergency fund? You are advised not to use your emergency funds for investment.

2. How long do you want to invest?

Certain investment products run for a fixed period, so if you have a specific date in mind as to when you need access to your funds, then some product types might not be necessarily right for you.

3. What is your risk profile?

How do you feel about investment risk? As the saying goes: the higher the risk, the higher the potential returns. Imagine if you incur losses on your investment; what is your risk appetite and how much loss can you stomach?

4. How much flexibility do you need?

It is important to note that when you invest your money, it can get tied up and is no longer easily accessible. But, if you have a sudden need for cash, how quickly and easily can you liquidate your asset? And what is the penalty for doing this?

It is always a good idea to consult an appropriate professional or financial adviser on the particular investment in relation to your own circumstances.

Alternatively, you could consider Affin Maximiser, an investment-linked plan with flexible investment options to help you gain more. You can choose to invest into different investment funds across both local and regional markets to diversify and balance the risks of your investment portfolio. Top-up your investment for more potential returns and get rewarded with loyalty bonus and extra allocation as you invest.

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AFFIN Maximiser

Your investment objectives may change over time, and Affin Maximiser gives you greater flexibility to reallocate your investment funds or change your selection of funds without any switching fee. As you may have different financial needs at different life stages, this plan allows you to withdraw your investment funds in part to accommodate your financial needs at any time.

Being more than just an investment tool, this plan also provides insurance protection of up to four times in the event of death or total permanent disability.

From now till 31 July 2021, all Affin Bank customers can enjoy a fuss-free enrolment via the Maxi Easi Campaign with no medical check-up required. If you have a moderate risk appetite, are able to commit to a long-term investment and looking for protection at the same time, then this might be a suitable plan for you. Or, if you are unsure of your risk appetite, feel free to speak to our Affin Personal Banker/Relationship Manager at your nearest Affin Bank branch.

Click here to learn more about this product.

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