If statistics are right, by 2020, 3.4 million Malaysians (9.9% of Malaysia’s population) will be over 60 years of age1. That means almost one in 10 persons will likely be in retirement age.-HSBC MALAYSIA


One might say that retirement planning a boring subject. Others might think that its too early to plan for retirement. During my interview with some of the pre-retiree, i ask them this question, “Do you know how long can your retirement money last?” surprisingly 70% of them will have no clue or or don’t care.

While most of the government staff think they do not need to save for retirement because they have gratuity and government pension.

There is one rule of a thumb you need to be aware of. You need 70% of you last salary to live comfortably, assuming you have paid off most of your debts

The 5 popular retirement myths 

1) EPF savings is enough for my retirement.

Lets talk about the majority of the non-government worker in Malaysia.

An active EPF member can save an average of RM158,302 by the age of 54, this amount will only last for 20-25 years


i will show you later if you factor in the inflation rate, the EPF fund won’t last that long. its’t that scary?


2) my children will take care of me.

20 years ago this ideas might works, but in today’s high cost of living, a fresh grade can barely earn enough to support the basic needs such as car installment, fuel and other related expenses. Young couple find it quite hard to provide for their own family and children as they move to the next stage in life to own a house and provide college fund for the children.


retirement- the impact of inflation



3) Its too early to plan for retirement.

i was at a Prudential annual conference july last year 2013. A MDRT (million dollar round table) platform speaker told this.

when should you start saving for retirement? you should start the day you are born-sanjay tolani


What if i tell you there is a huge difference between saving now, and saving 10 years later.

The power of starting early. If one is to achieve RM500,000 by the age of 50, base on and average interest rate of return 5% per annum.


Option 1: if you start age age 25, you will need to save RM836/month.

Option 2: if you start age age 35, you will need to save RM1,863/month.

my question is which option feel easier? or you might want to know other option?

Option 3: Start saving at the age of 1. you will only need to save RM200/month to achieve RM516,200.

your parents only need to do their part by helping you to save while you are still children. when you are independent, you can start saving for yourself.



4) i will find another job after i retire

There is no certainty that someone gonna hire you at your golden age. Retirement is mean for enjoyment. finding values with family, pursuing your aspirations etc. you don’t want to miss/waste the final stage of your life.



5) i will spend much less when i retire.

If you retire with no other saving and you rely 100% from your EPF fund, assuming you haveRM200,000 and inflation rate at 3.2% per year.

  • at age 60, if your take out RM1,800 monthly from your fund, your money will finish in 9 years @ age 69

we you will tell me, i won’t use that much during my retirement, what if i cut it to half?

  • at age 60, if you take out RM900 monthly from your fund, you money will finish in 19 years @ age 79

my question to you is, is RM900/month enough? are goods getting cheaper every year?



The Fact is


  1. 90% of EPF contributor have less then RM100,000 in their account.
  2. 99.9% withdraw their EPF saving in a lump sum once they reach age 55.
  3. 70% of the retiree use up all their EPF money in less then 3 years after retiring.
  4. 41% of malaysian do not have plan to build their retirement fund.
  5. Most do not separate their retirement saving from other saving. Among those who do, 83% would use up their retirement saving should the need arise.
  6. 73% do not seek advise form professional financial advisor.
  7. 39% intend to work beyond retirement age to supplement their retirement income.




retiree regret no saving



Do you want to be part of this statistic? Start early, Don’t risk your retirement money especially when you are closer to retirement. And make sure you have enough life insurance and medical coverage in case its not a smooth journey.


What i do as an advisor is to help you and family by providing you with a clear picture to your retirement. Helping you to get rid of unnecessary debt, preserving wealth and providing value for families. If you would like to know the service i provided to my client please feel free to drop me an email i will be glad to assist you.

wishing you a joyful harvest festival.

god bless.




Deferred Annuity or PRS? which is the best option?

Few weeks ago someone asked me this question through my Facebook private massage. So i try to best to keep it very simple so it is easier for her understanding.


1) The major difference you can find between PRS and Deferred Annuity?


2) The PRUretirement Reward

pruretirement reward

3) Capital guarantee

One of the feature i like about deferred annuity is the capital guarantee. From the table breakdown you can see under the green column the guarantee income payout during your retirement is very close to the total premium paid over the years.

base on this projection, you are guarantee to receive RM7,066/year which mean you will get monthly income of RM588 directly bank in to your account.

Look at deferred annuity as you safety net. If the investment fails, you won’t hit rock bottom because your retirement fund will be  there for you when you need it.

4) higher return with no downside*.

sound to good to be true. but is it is. The Premium paid is guarantee Preserved and yet you still can tap into higher investment return. As shown in the table,


  • investment return (x), 

total premium paid = RM108,000.

total return = RM376,777.

annual rate of return 7.34%


should it goes below expected return,

  • investment return (y),

total premium paid = RM108,000.

total return = RM168,514

annual rate of return 2.8%

5) Force Saving.

Which type are you?  The Spend first or Save first.

forced saving

i love the idea of force saving when it come to saving for retirement. Base on statistic, 95% of the people with the tendency of spending their income before they save.

Deferred annuity is a long term contract whereby you need to put aside a fixed amount of money for “X” amount of time and you cannot touch it before you reach age 55. This will ensure you money will always grow in time because you are not allow to withdraw it. (you still can withdraw it before reach 55 years old but you have to pay the 8% penalty)

6) tax exempt up to RM3,000 per year

this is a good way to reduce your income tax. at least you are eligible to enjoy this tax saving starting form year 2012 to year 2021. you can see how much money can you saved in taxes especially in this section on my previous post “how much can you save on insurance tax relief”.

7) Hassle free estate planning

monies in the PRS account will be subject to the usual estate distribution conditions. upon death, most of your assets including your PRS will be frozen.

Family member are required to apply for a Grant of Probate of Letter of Administration to unlock the deceased’s estate for distribution to the beneficiaries, which will take some time to do so.

For deferred annuity, as this is an insurance product, passing on the benefits of the policy to the next of kin is easily effected through a proper nomination and the proceeds are released with relative ease. This will bring our next point. 

8) This deferred annuity plan come with Death Benefit. 

How important it is for family members to have death benefit payout by insurance company?

Do you know, weather you have proper Will or without Will, you are subject to a minimum charges when you appointed a lawyer to administrate the decease assets. it does not come cheap. the lawyer fee is charged base on the total asset and the difficulty of the case.

The family members can use the death benefits payout by the insurance company to pay off the lawyer fee. The death benefits will usually takes 2 weeks.



A recent issue posted on by someone who is very disappointed with his policy he took from an insurance company. This guy also sent an open letter to the Bank Negara to voice out his disappointment and received numbers of attention from the media as well as insurance company representatives.

i would briefly summarise this case so that we can all learn form it.


What happen actually?

a guy own a life insurance policy 12 years ago. He is paying RM1,400 per year for the policy.

recently he was diagnose with prostate cancer.

After consultation, Doctor gave him two options.

Option 1: Undergo radiotherapy and hormone treatment which cost him about RM33,000. (non surgery type of treatment)

Option 2: To remove the prostate glad which cost a lot more then option 1, and comes with higher risk. ( which the insurance will covered full amount )

His doctor told him Option 2 might not be the best option to take.



The guy would like to choose for Option 1, but to his surprise his insurance only cover up to RM10,000 (lifetime limit) for outpatient treatment, which means he has to fork out RM23,000 from his pocket.


My thought on this:

The guy insurance coverage:

a) outpatient treatment: Maximum RM10,000 per lifetime ( apply for option 1)

b) inpatient treatment: up to RM400,000 (apply for option 2)

1) Most medical card offered today don’t segregation between inpatient and outpatient limit. if your medical card have this please  discuss with your insurance agent. we know that there are few company out there that offer this kind of medical card.

2) Please do annual policy review with your agent to get the latest info regarding you life insurance protection because insurance company always come out with new product enhancement from time to time.

3) Get a medical card that has the same limit for inpatient and outpatient.


The reason we get insurance coverage is for peace of mind and also to protect out wealth. imagine what would happen if you have accumulated a sum of money for your retirement fund just found out that your need to take out your own retirement fund to pay for medical fee. you can avoid this by choosing a right product.

knowing this simple fact would save you lots of in a long run.







1) How to properly fill up your insurance tax relief 

You should know there are 3 components which you can enjoy tax exemption up to a total of RM12,000 annually

A) life insurance & KWSP                   RM 6,000 
B) Deferred Annuity & PRS                 RM 3,000
C) Education & Medical Insurance   RM 3,000

prudential statement


Amount in the statement indicate yearly tax exempt qualified
To fill up, simply put in the figure as stated in the statement 
A) under life and KSWP = RM 399
C) under education & medical insurance = RM581.



2) Budget 2014, are you better off or worse?

Please visit here  to find out on the latest 2014 income tax guide


3) How much money do i actually saved on insurance and annuity tax exemption

please refer to a case study below


prudential comparison table


3 a) Let’s see how how much money you actually saved over a long period of time

Total money saved per year is RM960. 
What if you could pay yourself instead of the government. How much you will be better off?

Let me show you a simple calculation.
if you can save RM960 annually in a vehicle that giving you 7% of compounded interest

1) Compounded 10 years = RM14,192.26
2) Compounded 20 years = RM 42,110
3) Compounded 30 years = RM 97,030
4) Compounded 40 years = RM 205,065

* Assuming Client file under the same income tax bracket

Would would prefer the money to be in your own saving account or in the government account?