Retirement is when a person stops working altogether… are you ready for it? (photo credit: Malaysia My Second Home)
By Palau Shavin
At what age should you start planning for retirement? If you listen to financial consultants, the answer is: pretty much the moment you start working. Putting 10% of your salary aside for your later years is a good plan, and will see you in good stead when it comes time to hang up your work clothes.
Realistically, however, most of us don’t think of retirement until we are in our mid to late 30s, or even our 40s. With every passing year, the dreaded R word looms larger. Even the decision to increase retirement age to 60 only postpones the inevitable. The truth is most of us are ill prepared to survive without a monthly income coming in.
What if you were single, or married, but childless? What are your options? Business Circle spoke to a journalist who, along with her friends, has drawn up plans for retirement.
Viji Vincent is a 40-something media practitioner who admits she never really gave serious thought to retirement savings until four years ago. That’s when she decided to get a good agent and use some of her EPF money to invest in unit trusts. She also decided to open a separate savings account for retirement. But even then, she admits it is not enough.
“Being single, I have not fallback option if I run out of money when I retire. So I had to come up with some sort of plan. And I have several friends, some of whom are married but childless, who are in the same boat. So we put our collective heads together and came up with something we believe is workable,” says Viji, who lives with her older sister.
First order of business, she says, is to get out of Klang Valley. “It’s great being in the beating heart of the nation, but cost-wise, it’s a real killer. My friends and I own property in Kuala Lumpur/Petaling Jaya, so we plan to rent them out and move somewhere cheaper.”
Or, if money is tight, they could sell the property and use it to help supplement their EPF savings. An apartment bought for about RM200,000 in 2004 is now worth more than double that. So in 15 years, it could be worth over half a million. A nice nest egg for retirement.
Go North… or East
According to Viji, moving up north or to the east coast will offer a better (slower, cheaper) standard of living. Ipoh has been voted one of the best places to retire due to its low rental, abundance of good food and proximity to good hospitals. Taiping and Kulim are also good options, as is Kuala Terengganu.
Without children to care for her in her old age, Viji has to rely on friends. To this end, she and her friends are considering pooling resources and buying a piece of land – five acres or so – where “we can build simple houses and have land left for gardening, maybe even planting vegetables and herbs. Perhaps rear some chickens even.” Who knows how much kangkung will cost in 2030?
“Our houses don’t have to be big – a single story with two bedrooms and a bath, a kitchenette, a verandah where we can have tea in the evenings or chill out with a book,” says Viji.
There will be a communal kitchen and dining area or mess where we can take our meals together. This building will also house a library, comfy chairs and tables for gin rummy or board games, and a pool.
“Hopefully, we will still be able to drive around until our late 70s, or else, the person with the best eyesight will have to take on driving duties. That way, we’ll be able to get to the Klinik Kesihatan for our regular checkups,” she adds.
This commune living gives each of them privacy, but allows them to be close enough for security purposes and to meet up every day (and thereby keep tabs on each other). Cooking together helps to keep costs down, and having houses designed in the kampung fashion will hopefully keep them well ventilated (and cut air-con bills use).
To keep costs down further, the commune would look at eco-friendly features.
“It would be great if we could have our own artesian well to ensure constant supply of water, or else we would just have to make do with extra-large water tanks. Of course, we would also be utilising rain harvesting and solar power – it may cost more in the beginning, but definitely worth it in the long run,” says Viji.
By the time they retire, the whole country should be broadband accessible, and thanks to the Internet, they will be able to buy most stuff online and have them delivered. Tesco already delivers groceries at no extra charge, and many people do most of their banking and bill paying online.
Even if their dream of having their own “commune” doesn’t materialise, it would still make sense to rent or buy homes in the same housing estate, maybe along the same road or adjacent. One of Viji’s former housemates did this; she and three friends who all single decided to buy homes along the same road. Now retired, they go on holidays together and are very close knit. Perhaps this truly is what families of the future may look like.