Expats living in Malaysia often benefit from a high level of disposable income due to generous salary packages combined with inexpensive day-to-day living, which makes their time spent working there a great time to get ahead in the retirement planning game. In spite of this, planning a pension often comes way down the list of priorities when you have a new job to get your teeth into, an exciting and diverse new culture to explore and wonderful holiday destinations on your doorstep for short breaks and weekends away.
Retirement planning in Malaysia needn’t be so time consuming that it takes away from all that but it does require a little effort. There are some simple rules to follow (which actually apply wherever you live). Here are the four steps to take to ensure that you are on track for a retirement to match the lifestyle you are currently enjoying
1. Start early
The golden rule of retirement planning is to start as early as you possibly can. Compounding is a magical thing which can bring about astonishing growth in your savings and the longer you money has to compound, the fatter your retirement pot will get. Start your pension pot as soon as you can.
2. Save regularly
Small and regular is preferable to waiting until you have a big chunk of money to put aside. Chances are that when you get that big sum it will be too tempting to spend it on something else and you will never start. Even if you can initially only afford small payments into your retirement fund at first, getting into the habit of saving is a great idea and seeing your money grow will incentivise you to continue and to increase the payments as your circumstances allow.
3. Review often
Retirement planning in Malaysia is not simply a case of starting and leaving your pension fund to its own devices. It does need a small investment of time every so often, ideally every quarter, for you to review progress and make changes according to how your savings are performing and your circumstances are evolving.
4. Seek professional guidance
Expats in Malaysia have potentially complex issues to take into account with regard to taxation. Trying to pick your way through this minefield on your own can be daunting but help is at hand! I am a qualified financial advisor and will be able to help you clarify your financial goals – not just those concerned with retirement planning in Malaysia but also regarding the protection of your wealth and estate planning – and work out whether you are on track to achieve them.
In this day and age, with state-funded pensions under attack and life expectancy increasing, neglecting to have a sound retirement plan in place could be considered downright irresponsible. It is your duty to ensure that you are not a burden to your loved ones in the future and can achieve the comfortable and worry-free retirement most of us strive for. Follow the four steps above to get your retirement planning in Malaysia underway.