Retired clinical psychologist and professor Dr Kenneth Barringer talks about the key to happy and productive retirement years.

ACCORDING to research done by Hearts & Wallets, a financial research firm, Americans are stressed out thinking about retirement, and for good reason. About 40% of Americans aged between 45 and 64 with less than US$100,000 in assets have recorded “high to moderate amounts of anxiety” thinking about their retirement. 

Similarly in Malaysia, many are of the view that one can never have enough to weather retirement, citing rising inflation and the skyrocketing cost of living. A recent HSBC report says an overwhelming number of Malaysians, or 81%, are afraid they will be destitute upon retirement.

In its Malaysian report, The Future of Retirement: A Balancing Act, the London-based financial firm also found that 49% of the 1,000 people surveyed disclosed that they could not save because they had to pay off debts. And worse, 27% of the locals surveyed said they had no plans to save for life after retirement.

While it never too early to start planning for your retirement, Barringer recommends drawing up a blueprint at least several years before your retirement. “Start planning for a meaningful and vital retirement experience as soon as you feel the need to make concrete plans for the future, usually in the mid or late fifties. Make more specific plans in your early sixties, but do it with the help of a retirement counsellor who can raise the critical issues that need to be resolved,” he says. 

“We get all kinds of unsolicited offers from a variety of sources, and we can jump at them if we are not careful about getting good, responsible legal and financial help.”

Barringer also recommends making continued education and being internet savvy a lifetime experience that is not only for work but also for the enhancement of one's personal life, as embracing the existing tools will make life easier in retirement, including money management. 

Similarly, Lily Fu, a retired educationist, believes that having a wholesome retirement experience requires more than just individual planning. Fu says ageing is viewed negatively in the Asian context as seniors are portrayed as frail and unproductive, and are often overlooked — stereotypes that have been perpetuated for centuries. 

“It actually takes a whole community to instil the culture of saving — families, teachers and the state. There needs to be a change in mindset when approaching this subject,” she adds.

The 67-year-old founder of Seniors Aloud, a blog dedicated to empowering the silver generation, also says that relying on a single source of income, such as one’s Employees Provident Fund (EPF) savings is not wise. 

“Try not to rely on just one source or even a family member to support you. Rely on yourself and continue working while you can,” she says. 

Last year, the EPF revealed that 69% of its contributors have less than RM50,000 in their accounts at the age of 54 — much lower than the RM120,000 recommended by the federal government. This is cause for concern as the average life expectancy of the Malaysian population is 75 years, according to the National Statistics Departments. To address the issue of growing ageing population, the government has raised the minimum retirement age for civil servants and the private sector to 60.

An EPF contributor’s account is divided into two portions —70% goes into Account 1 and the other 30% into Account 2. Members are only allowed to withdraw the savings in Account 1 at the age of 55. 

The EPF allows for early withdrawal from Account 2 for specific purposes, such as to pare down one’s housing loan, finance one’s education and paying for one’s medical expenses. The outstanding amount from this secondary account may also be withdrawn when the contributor turns 50.

The amount one needs to retire on varies according to lifestyle choices and savings accumulated. Fu’s estimate for a fully retired person in an urban setting is at least RM2,000 to RM3,000 monthly, though she admits it could be a conservative estimate for some. 

“People say knowledge is power, but I don’t agree. Knowledge when applied is power. Making responsible and well-planned choices will save us a lot of hassle going into retirement … the consequences of not being prepared is greater than what we think.

“I am quite blessed that my two children take good care of me so that I can continue doing what I love doing, but it is the same for others," says Fu, who also supports her mother, who suffers from dementia. 

A successful retirement only happens by design, she adds. “First, you have to be financially secure. You must be emotionally and physically fit as well as train yourself to be mentally alert.”

To stay physically fit and mentally alert, Fu takes part in community activities, such as organising courses on empowering seniors to become internet savvy and managing social media for the University of the Third Age (U3A) Malaysia. 

Under U3A, Fu helps to recruit trainers to run courses ranging from learning a new language to skill training. U3A is an initiative by the Institute of Gerontology at Universiti Putra Malaysia. The project is jointly supported by the government and the United Nations Population Fund.

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on May 18 - 24, 2015.

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