Sunday, 2 June 2013

Saving up for the Future

If you've read my previous post about the increment in the retirement age from 56 to 60, and the benefits (?) of it to these work-obsessed veterans, now here I would like to add a side of dessert to this notion.

One may look at it as a better investment for the older generation because by the time we reach 50, we are entitled to withdraw some (and I do mean some, not all) of the money gathered at your EPF account to help pay off debts, loans or even help you in your down-payment for properties or motor vehicle. But let's face it, when we reached that age where we can finally enjoy the cumulative sum of that money, we tend to splurge a little bit (if not a lot), and that would reduce the amount of the money stored up in your account. If that would occur, and when you finally hit that age for retirement, that so-called pension fund may possibly be not enough to support your living cost for the remainder of your older days. Do you understand where I'm going with this argument?

By extending the pullout age limit, these seniors can actually save up a little bit more cash in the pension fund by working for another three to five years per say. Because naturally, we all know that the amount of money being deposited in that pension fund which are taken from your monthly wage is not that much... even more less if let's say your monthly income is less than RM1500. The mathematical equation here is:

... and ...

And so, by expending your life force to enslave at the salt mines for another five years would result in a bonus of extra cash flow into your pension fund. Isn't that a good news? So, instead of worrying about the amount of money left to be spend when you finally hit the golden age, you'll be rest assured that you had set aside enough greens. That is if you wish to further constrain yourself to work even more. I can only voice out my opinion not change the way you think. If you find my explanation a bit confusing and scattered about, you can read more about this act from Malaysian's Digest from which I get idea from though....