Personal finance is so… so… BROAD, isn’t it? We come from all kinds of backgrounds and have all types of interests and go through all sorts of life circumstances. Looking for specific answers can be tough. Sometimes you don’t know what you don’t know – not even the search term for it. I have suggested Reddit as a resource page before, but the sheer amount of available information can be enough for some people to go, ‘nope’ and close off the tab.
That’s a shame, because one of the best ways to learn about personal finance is to learn from the Reddit community. The most useful information get the most upvotes – so you get to save time by reading only the best of the best as determined by those personal finance subreddit community members themselves.
Even though r/PersonalFinance has a lot of members and contributors, I wouldn’t really recommend it and some other subs to Malaysians as many topics are specific for the US crowd. The r/MalaysianPF community, on the other hand, would be great if it wasn’t, um, dead.
BUT. There are other personal finance subreddits that you can explore. They will help you save, spend, invest and manage your money better – for a variety of occasions. Here are 25 of them.
In my previous sponsored post about retirement, I talked about the importance of saving up for retirement, because the fact is that the majority of Malaysians don’t have enough money to support their golden years.
Who best can show you the reality of retirement, than actual retirees in Malaysia? Here are 3 retirees, and what they’re doing now to financial support themselves.
Mr Moothy. Age: 65. Spent EPF money for family. Returned to workforce.
Mr Moorthy bought property, but had to liquidate it to help his children’s finances. Because of a parent’s love, he had to return back to the workforce.
The consequences of not saving for ourselves can affect our parents.
Mr Haris. Age: 57. No EPF savings (self-employed). Still working.
Mr Haris is self-employed, and still works to support himself and his dependents. This scares me, as I am self-employed as well, which means I don’t have the ‘paksarela’ 11% deduction every month.
If you’re self-employed, channel a percentage to EPF savings anyway. And have some passive incomes to help you.
Mrs Cheng. Age: 74. Survives on late husband’s minimal pension. Depends on daughters.
Mrs Cheng stays with her daughter. Her financial position can be summed up in two words: filial piety. It’s not uncommon for us as Asians to expect this.
This is a poor strategy though. What if you don’t have children to depend on, by choice or by force?
Are you on track to retire without money worries? Go to the original article and find out more about the reality of being retirees in Malaysia, and more about Mr Moorthy, Mr Haris, and Mrs Cheng’s life.
Earlier this month, I was contacted by CompareHero, who wanted my opinion on retirement in Malaysia. This is what I said:
“Not being able to afford retirement is scary to me. I can’t imagine how unbelievably stuck that must feel. I don’t want to be 60 and in pain but have to push myself to go to work every single day just to be able to pay for medical bills.
This is why I am a big fan of EPF, PRS and achieving financial freedom. And if the maths say I must start now, in my 20s, then I guess I must start now. Maths doesn’t lie!”
Here are some things that I learned from the article.
EPF Basic Savings for retirement has increased from RM196,800 to RM228,000
According to the latest revision in 2014, to take info account higher cost of living and longer life expectancy, the amount that an individual now need in their EPF Basic Savings is now RM228,000.
You can benchmark your EPF savings progress
RM228,000 at 55 years old feels like a long time away, but you can check your progress towards this amount based on the image below.
Check your EPF statement (I know some places have that easy EPF printers where it’ll print out your statement with just IC). Are you on track?
The easiest way to keep on track is to maintain 11% deduction instead of 8%. The difference is pretty big – see example below with RM3500 monthly salary.
Most people don’t have enough EPF savings
The current statistics about Malaysians’ average savings are quite sad. According to the image below, only 1 in 5 of you will have enough savings to retire (but only enough to last 5 years! Assuming you retire at 55 and live until 75 years old – the average Malaysians’ life expectancy – you only have enough money for 5 out of 20 years).
Significantly, almost 7 out of 10 Malaysians over the age of 54 years old have less than RM50000 in savings. Assuming RM1000 a month, that will last just slightly over 4 years!
Are you on track to retire comfortably in Malaysia? Go to the original article and find out if you can actually survive on RM1000 a month and how EPF works.