Even if it’s a long way off, think about what you want your money to do for you when you retire. It’s a fun exercise. Go ahead and dream a little.

Maybe you want to pay off your mortgage, help your grandkids with college expenses, travel to another country, or start a new hobby you haven’t had time for during your working years. If you can picture what you want retirement to look like, it’s easier to plan for it.

No matter what your goals are, saving and planning now is a smart idea, so let’s walk through 4 steps to helping you create your retirement plan. 

1. Find out how much money you may need in retirement.

Ah, ignorance is bliss. But it won’t help you make your retirement dreams come true. Use PPA’s retirement calculator to help you get an idea of what you need.

2. Save. Invest. And save some more.

Most experts say at least 10% of your income (in addition to EPF’s mandatory contributions that adds up to 23%) should go towards retirement. If you’ve started saving later in life, you may need to bump that up.

Not possible right now? That’s OK. Save what you can and commit to increasing 1% every year until you can hit the mark.

Options for saving and investing can include:

• Employees Provident Fund (EPF)
• EPF i-Invest 
• Private Retirement Scheme (PRS)
• A variety of investments like unit trusts, stocks, bonds

The sooner you start, the more potential your money has to grow over time. It’s all about compound earnings—when your money earns more money.

Let’s say you invest RM 10,000. And you earn 5% over a year.

So now you have RM 10,500. Over the coming year, you make 5% not just on your initial RM 10,000 but also on the RM 500 you earned last year. That’s the benefit of compounding in action.¹

3. If you’re short, decide how to make up the difference.

If you have gap between what you’re saving and what you may need - consider:

• Deferring more cash into your retirement plans. Even putting 1% more in can make a difference and it’s more doable. 
• Managing debt so you have more money in your budget for long-term savings. 
• Delaying retirement by a year or 2 to help boost your savings.
• Working for a bump in income and then save it. How? Change jobs, try for a promotion, or turn a side hustle into extra cash flow.

4. Make a date with your retirement accounts once or twice a year.

• Review your plan. Your retirement accounts should match your risk tolerance and goals. 
• Check your progress on saving – could you save more? 

¹ The assumed rate of return is hypothetical and does not guarantee any future returns nor represent the returns of any particular investment. Amounts do not reflect the impact of taxes on pre-tax distributions. Individual taxpayer circumstances may vary. For illustrative purposes only.