Grow Your Wealth with Retirement Savings

Retirement Savings

Grow Your Wealth with Retirement Savings to Ensure a Financially-Stable Future

Growing your retirement savings can seem like an overwhelming task, especially considering the various investment options out there. However, with proper planning and a focus on your goals, you can achieve the financially-stable future you need.

EPF to grow your retirement wealth

If you’re a working professional, a portion of your income is automatically deducted into the our local retirement savings – the Employees Provident Fund (EPF), of which there is Akaun 1 and Akaun 2.

Akaun 1 is off limits until you reach retirement age, which is great because this means you are guaranteed savings when you reach the age of 55. Akaun 2 however, allows you to make withdrawals and this is usually towards purposes that will help you have a more stable retired life such as for education, health, or the purchase of your home. You may read more about the rights with each account in this article.

The great thing with EPF is that you are guaranteed at least a 2.5% dividend on your savings, and in recent times, the dividend has been around 6%. This is the power of compound interest. Your savings will grow year-on-year without you even needing to do much.

If you want to know how much you have in your retirement fund, use the i-Akaun portal which is EPF’s online service. It’s a great tool that helps you achieve your retirement goals, because you can keep a close eye on your funds, make withdrawal requests, and gain access to your latest EPF statements for banking needs.

But first, set your goals.

Before you even embark on investments, we suggest to pause and think about your retirement goals. Here’s how:

  1. Begin with the end in mind: Envision your retirement and think about the kind of lifestyle you would like to have. Thereafter, work backwards to achieve that.
  2. When do you plan to retire?: Legally, the retirement age is 55, however some of you may want to retire earlier in life, or later. Either way, think about how long you have until retirement, how many years do you have left to save?
  3. Think about your lifestyle expenses: How much do you need to survive in your preferred lifestyle once you retire?
  4. Be SMART: Ensure your goals are Specific, Measurable, Attainable, Realistic and Time Bound.

With your retirement goals in mind, you can then embark on putting the plan into action, think about savings accounts that give you a high return on interest.

Compound interest is key when growing wealth, because over time, your money will continually to exponentially grow and by the time you hit retired age, you will be basking in wealth. At least, we hope so. The key though, is to start early and to start young, thus giving you more time for your dividends to grow before you retire.

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2 thoughts on “Grow Your Wealth with Retirement Savings

  1. Hi Leigh,

    I’ve read a few articles and books that mentioned the formula to calculate how much I need in order to retire. It is said to multiply my yearly expenses by 25 to get the target savings that i need to accumulate (in another sense, is to retrieve 4% annually from my savings.)

    eg.
    RM36k x 25 = RM900k
    so as long as i save at least RM900k i should be able to retire “safely”

    However, my concern is, I don’t see this formula taking in account of the inflation rate. If to apply the standard 3% inflation, in 30years time the cost will be doubled, and so ain’t I suppose to be targeting 1.8mil instead?

    I’m a little bit confused here, or perhaps this formula has to be recalculated every now and then?

    • Hey Jun,

      The 4% rule is more of a guideline. And yes as inflation rises, your expenses go up as well. So you set your goal based on the ever increasing expenses.

      It has to be recalculated every time your expenses go up. =D

      Hope this explains it.

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