For those who have just started working or are in the early years of their career, retirement is probably something very distant. However, it is never too early to start building your nest egg and working towards a successful retirement. Here are some tips on how you can start building your retirement funds early, especially if you are in your 20s or 30s.
Start Saving Your First Paycheck
Getting your first paycheck is a wonderful experience and it is only too easy to splurge it all on shopping, fine dining and travel. A recent article I read featured female shopaholics who spend an average of RM1,000 a month just on shopping! Shop and treat yourself, if you want to, but before you do that put aside just 10% of your pay into a savings account and increase that percentage over time as your salary grows. Don’t be like Becky Bloomwood in “Confessions of a Shopaholic”!
More retirement saving tips below.
Contribute Regularly To Your Pension Fund
In Malaysia, the EPF contribution rate was recently reduced to 8% from its previous 11%. If you can, don’t opt for the reduction in your EPF funds as it will form the bulk of your retirement nest egg 30 years down the road. If you can, look also for employers who pay more than the requisite 12% employer’s contribution into the fund. Some multinationals in the market pay up to 16% for each employee’s fund which is a substantial monthly contribution.
Start Investing Early
Being at the early stages of your life and career gives you the valuable gift of time. You have at least another 25 years to go before your retirement and hence, many good years of investing opportunities. So take advantage of the current economic downturn to identify undervalued stocks and investment opportunities to help you grow your retirement fund.
Pay Off Credit Card Debt
This is constantly repeated everywhere yet there are some who still do not pay off their credit cards and continue to max them out. It is expensive debt as the interest charges on them are high. Let us also not forget that it was ballooning debt that triggered the economic downturn. So, do not spend more than what you can afford and make it a habit to pay off your credit cards every month.
Start saving and investing wisely early and you will be glad for it in your retirement years!
March 3rd, 2009 at 4:24 pm
Well at this time of economy, saving is very important, but sadly to say that more than 90% of ppl cant really save, everytime when the salary come out, pay house loan, car loan, credit card, insurance, phone bill etc.. all gone within a week
March 5th, 2009 at 1:07 pm
Hi Iris – well start saving with every little you can because every little bit counts
March 21st, 2009 at 6:26 pm
Financial advice needed!!
I am a student myself, thus saving money is really difficult seeing that the economy doesn’t favour us to do so. Besides, I already have debts i.e. education loan which costs about RM22,000 in hand. The future scares me for not having a back-up plan never mind the fact that I am covered by insurance yet. Despite the fact that I have little knowledge in investment and financial plannings, I plan to throw in RM1000 from my meager savings in unit trust and start saving RM100 each month after that, for as long as I can. *fingers crossed* (help! – which to go for, they’re so many existing right now…Maybe public mutual since it has recently received an award).
Money from my scholarship will be coming in soon so, I need advice on how to save and grow them in small scale. What can I do with as little as RM300-RM500 monthly to spare in order to assure myself financially in the years to come (to buy my own car, support my parents, to splurge on personal wants etc).
What do you experienced adults suggest to a young adult with limited fund in planning his/her financial future?
March 23rd, 2009 at 3:39 pm
Hi Uninsured Kid,
Thanks for your comment
I have published your comment in my latest post and will be seeking advice from readers on how best you can save and plan your financial planning for your future.
Lets see what great advice they come back with!