Do I have enough to retire?

 

I was looking at my personal papers and documents recently. This usually happens after I’ve messed up something so badly that there’s a threatening lawyer’s letter or two from an aggrieved financial institution such that I have no choice but to deal with the issue.

Over decades of working, I managed to squirrel away a few ringgit here and there for retirement. I spent quite a lot of my earnings sending my kids to colleges and universities all over the world, so I did not have as much squirrelled away as I could have otherwise.

But still I locked up some savings here and there. Hence the need to occasionally check the papers. I’ve already told my kids not to expect anything from me when I kick the bucket, except perhaps the bucket. Giving them the best education I could afford is better than leaving behind a pile of money when I’m gone.

The investment into their education has done well. They had the chance to study as much, or as little, as they wanted. Half of them threw away their textbooks with a vengeance after they graduated, whilst the other half just love graduating and will probably never stop.

Well, whatever makes them happy.

During today’s uncertain times, I keep thinking about a burning financial question – do I have enough money to retire without burdening anybody whilst taking care of whatever responsibilities I still have?

It’s a real worry. I’ve seen some pitifully small and insufficient amounts of money left to many of our Employees Provident Fund (EPF) contributors. The money is nowhere near enough for them to retire on. In some cases, it’s not even enough for their retirement parties!

There are bigger political and societal issues, but the Covid lockdowns didn’t help. Jobs were lost, and the EPF was opened up on a few occasions to allow desperate (and opportunistic) depositors access to much-needed cash. This helped to drain the funds to dangerous levels for many.

There are other factors at play too. People are living longer. The extra years often need extensive and expensive living and medical care. To make matters worse, in many countries demographic changes mean there aren’t enough kids who’ll grow up to top up the nation’s retirement funds.

The world meanwhile has certainly grown richer. Billionaires seem a dime a dozen around. They are already talking about there being a trillionaire at some point not too far down the road.

It’s crazy. But all of this wealth is often not real – it is mere paper wealth, often concentrated in the hands of a few who keep getting richer whilst the majority are getting poorer.

Retiring today has become scary. Back in the old days, the few lucky enough to retire from employment looked forward to a life of collecting pensions back in their hometown where they are generally more well off than most of their neighbours.

Back then, especially in the kampungs, people worked, grew old and had their kids look after them. But often the hard life they had to endure didn’t give them a high life expectancy, so their dependency on their kids didn’t last very long.

My own parents lived to exactly the life expectancies of their genders then – 78 for my mother and 73 for my father. Luckily they had us children to take care of them, and given that their needs were few (and cheap), they weren’t much of a burden to us.

Many people retiring now can’t count on that anymore. Most jobs don’t carry pensions, and EPF is the only option for many workers. Their children are likely struggling themselves, or else living in far off places trying to manage their own life challenges.

We’ll soon see senior citizens working in fast food restaurants or convenience stores as in many other “rich” countries to survive in their old age. To compound the issues, we also don’t have a great social security programme that takes care of citizens like in many European countries.

So, saving when you are still working is key to a happy retirement. Many however struggle in their day-to-day life, so for them saving is harder than for others. And then there are others who could save but are busily living beyond their means.

When I look at my financial situation, I no longer look at the returns on my investments – amount and percentages and all that. I was never very good at investing anyway, and often was too risk-happy when I ought to have been cautious, and vice versa. An investment analyst looking at my numbers would barely give me a passing grade.

But that doesn’t bother me too much these days. In a few short years, I’d reach my parents’ age when they died. Getting there would be nice, and passing them would be a bonus.

Would I have enough to last me till then?

It’s difficult to say, given the many unknowns – cost of living, lifestyle changes, health and illness … .and of course when exactly will my time come!

So, I simplistically assume that I need “so much” money for that, which I would call a 10-litre “bucket” of money. To have some safety margins, I’d probably need a 15 litre “bucket” of money, just to be on the safe side.

What I have now, in one form or another – EPF, the house I live in, other investments etc – is probably enough for a 10-litre bucket, and perhaps even a 15-litre bucket.

Going by that, I’m probably OK for the coming years. The kids are all grown up, there’s just me and the missus, and we don’t have expensive tastes except we like to travel. You can travel cheaply, or you can do it expensively, so there’s a choice here.

Our private health insurance will last a few more years, and after that we may have to rely on the health ministry for succour. It’ll be time to claw back some of the taxes I paid all my adult life.

A professional financial advisor would tear his or her hair off with my totally unscientific, perhaps even uneducated, way of looking at retiring. And to be fair, if you are any younger, I wouldn’t recommend this approach to you myself.

But given that I was born and grew up with basically nothing, anything left over at the end of my days, however little, would be a bonus and a sign I did OK in my life.

And that’s good enough for me. Who wants to live a long life working just to accumulate money and then die when they are at their richest?

That would be so sad. When I kick the bucket (hopefully the 10-litre bucket, and not the 15-litre one), I want it to be a joyous occasion. Maybe even a time to throw a true “retirement” party! - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.