OCBC Life Goals

Retirement, a new lease on life
By The editors from The Edge
Retirement is no longer viewed as a time to wind down one’s career, but an opportunity to continue pursuing goals, dreams and aspirations. As such, this second lifecycle has provided an avenue for many to plan how they would want to experience their life at this stage. With better access to healthcare coupled with advances in preventive medicine and adoption of active and healthier lifestyles, Malaysians are generally living better and longer. This, coupled with the luxury of freed-up time, has ushered in a new era for retirees to continue enjoying productive lives, to seek out new challenges and remain active contributing members of society.

In the past, the idea of retirement was commonly associated with putting up your feet and doing things in a leisurely manner, but today it is vastly different. Fuelled with a renewed purpose in life coupled with knowledge and experience, people today are viewing retirement as an opportunity to actively pursue their life goals. This evolving ideology has allowed many to use their retirement as a time to not just sit back and relax but explore new possibilities and seek out fresh accomplishments in their lives. A perfect example of this is Tun Dr. Mahathir bin Mohamad who returned to serve as the Prime Minister of Malaysia, for the second time, at the ripe age 92. He has with him also the Council of Eminent Persons comprising Tun Daim Zainuddin (80), Jomo Kwame Sundaram (66), Tan Sri Dr Zeti Akhtar Aziz (71) and Robert Kuok (94), actively sharing their knowledge and expertise to help to take the country ahead.

Across the world, retirement is now viewed as aspirational and inspirational, a second stage of life for many to realise their ambitions. We have seen it happen extensively too in the present with many retirees now looking to travel more and indulge in their passions and hobbies. Some have also returned to school to continue their education and to pursue knowledge as well as learn new skills. The evolution of retirement has also enabled some to extend their career in the workforce and pursue entrepreneurial endeavours. Some have also put their time to good use by engaging in community work and giving back to society.

According to the OCBC Life Goals calculator, which uses data fed into it to calculate tuition fees and living expenses, the average cost to pursue a tertiary education abroad currently adds up to RM1,355,000 in the US and will increase to RM1,521,000 within three years. In the UK, the cost is RM732,000, rising to RM903,000 within three years, and RM593,000 in Australia, going up to RM668,000.

Having a solid financial foundation is vital to seeing your retirement goals through. Understanding how much and how well you’ve saved is only one piece of the financial puzzle. One also has to factor in inflationary pressures, which will undoubtedly raise prices for products and services in the years ahead. The travel sector for instance will see consumers spending more on holidays in the years ahead. According to the 2018 Global Travel Forecast, travel prices around the world such as airfare and hospitality are due to increase by as much as 4% percent each year.

The same applies to education. At present, the cost of a non-engineering post graduate programme can cost an average of RM35,000 at a private university. However, taking into account the yearly increase of educational costs of between 3% and 5%, the same course will cost significantly higher in the years ahead.

People would also like to stay in shape both mentally and physically during the retirement years, which means investing in wellness-upkeep programmes as well as going for regular health care checkups. According to the Malaysian Health Care Travel Council, the average medical inflation rate in the country is between 10% and 15% per year, which translates to an increase in medical costs and higher insurance premiums.

Although retirement goals might differ, it is always best to benchmark against those goals we have listed with a yearly inflation rate of 3% to 4% to ensure you are able to see them through those post retirement years. To estimate how much you need for your retirement goals, you can try OCBC’s Life Goals Retirement Calculator for free within their website. This simple calculator helps to assess your current financial status versus your retirement goals in four simple steps.

As such it is prudent to set out to create a sound financial plan for a life of your own design for the future. Planning ahead will afford you the foresight of bolstering your long-term financial planning with additional finances and diversified investments. By gaining this head start, expanding on your plans becomes a distinct possibility.

In a time past, retirement was viewed as something you saved and prepared for, but now it has become an avenue to reinvigorate one’s life, purpose and ambition. A golden opportunity, if you will, to turn retirement into productive years to do more things and discover more meaning. Knowing what you want out of life and preparing for it will help secure the lifestyle and future you want and deserve during your retirement years.