How much money do you need to retire well? Is it 500k or a million ringgit? Take a look at below report ‘The State of Households 2018’ by Khazanah Research Institute.
It shows that;
a) the average of household expenditure in 2016 was RM 4033 and
b) the mean household expenditure has grown at the rate of 5.6% per year
Household expenditure means the amount of monthly consumption or expense made by resident households to meet their everyday needs, such as: food, clothing, housing utilities, energy, transport, durable goods (eg. car maintenance), health costs, leisure, and miscellaneous services.
Thanks to Khazanah report, now we can predict or plan how much that we need at least to cover for necessity requirement (take note that this doesn’t cover lifestyle such as travelling, new car etc). Ideally the yearly withdrawal should be about 8% of your total savings. If you put your savings at an institution that generate 6 -7% annual returns, then your money is enough to sustain throughout your retirement (perhaps may last more than 20 years though).
Table above gives an indication of how much money that you need if you plan to retire as of that year. So take a look at your total savings (including epf, fd, asb & tabung haji) and see if your savings is on the right track.
What to do if you want to improve your savings?
If you have 5 – 7 years, it is never too late to start savings/investing at the right place. Some good funds which give 9-10% returns, eventually will double your capital in 7-8 years. But say NO to ‘skim cepat kaya’ ya.
Wish you to plan well so that you can enjoy life.
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