Joe starts saving RM5,000 a year for his retirement nest egg at 28, whereas Jane starts at 30. Assuming they both make 7% return on their savings, at 65, Joe will have RM801,687 while Jane will only have RM691,184!
Their studies have also emphasised that not only are many largely unprepared for retirement, but that relatively few have a back-up plan in the event they are forced into retirement earlier than planned.
What then can you do to increase your confidence in having economic security in your golden years? Don't just worry about your financial future, take action to rebuild some measure of a secure retirement. Increase your level of preparedness by taking an interest in your finances. Take the following steps:
■ Start a saving habit
■ Increase your financial literacy with easy to understand educational material, talk about it to raise awareness
■ Set goals; determine how much you need
■ Take decisive measures and strategise
■ Seek advice from professionals
Learn to take on more risk with investments, as leaving all your money in cash will not help in combating the ravaging impact of inflation in the long term. Learn about the power of compounding, diversification, asset allocation; building up an investment portfolio.
Most of all, start when time is your ally, not your foe; decide to put aside a fixed percentage of your income towards your retirement nest egg to prevent having to resort to catch up contributions at a later stage.
It is now or never, as the song goes. My advice is START NOW!