Map Out Your Legacy

Covid 19 have change everyone’s life. Our daily life have to pause to give way to this Covid 19 pandemic. Same goes to our saving. For those elderly who save their money mostly in fixed deposits, they are having a tough time because of the reduce interest rates. Employers suffer due to unable to operate during MCO. Employees too have to dig out their emergency funds to pay for their day to day expenses.

Although EPF (Employees Provident Fund) making a move to allow the contributors to withdraw their EPF savings to mitigate the impact of Covid 19, but this will contribute to further reduction in saving upon retirement.

The EPF has previously stated that the fund withdrawal led to 6.1 million members having less than RM10,000 in their EPF accounts, among whom 3.6 million have less than RM1,000 in their EPF account. Members would have to work extra 4-5 years to gain back their savings that’s being utilize during the pandemic.

EPF chairman Tan Sri Ahmad Badri Mohd Zahir also highlighted that 48% of EPF members below age 55 have critically low savings, an increase of 28% as compare to before pandemic.

We are aware that one cannot depends solely on EPF savings to fund for their retirement. We have to diversify our savings to different investment portfolio to ensure we do not place all eggs in only one basket. What kind of asset classes should we rely on? This is basically depends on your risk appetite.

There are 5 investment portfolios you can consider, such as cash, bonds, equities, property and commodities. Each asset classes have their own risk, liquidity and expected yield. These assets classes have one thing in common, that is volatility except the asset class : cash. Although cash is not volatile but it may not able to fight against inflation.

What is important when we retire is to have a guarantee and consistent amount of money flowing to us every month or every year without the risk of volatility. Do you agree? How to find it? Besides putting your money to work for you in investment, put aside some money for annuity or endowment plan to build a guarantee source of income.

Look for plan which able to provide you guarantee cash payment every year, a minimum of 105% of total premium paid upon maturity and additional death or TPD(total permanent disability). Some plan also provide you retrenchment benefit too. End of the day, you have nothing to loss and most important is this amount of money will credit into your account every year no matter is pandemic or without pandemic.

For more information, kindly contact me.