THREE couples with different needs posed an interesting challenge for Prudential’s Wealth Manager, Joselin Ooi.
Ooi’s advice to the youngest couple, Mohd Khairi Ibrahim and Fara Lucia Razali, is that they must get into the habit of putting aside a small amount of money every month for their retirement fund.
Starting early buys time, which is the biggest factor in building a retirement nest egg. The sooner they start, the easier it is to reach their goal, thanks to the power of compounding interest.
A retirement plan such as the PRUretirement accumulator would be ideal for this young couple, whereby an investment of as little as RM300 a month (which can be likened to forced savings), can potentially grow into a sizable guaranteed monthly income of RM1,114* upon retirement.
There is also the flexibility of increasing their retirement fund when they have extra income such as a year-end bonus or salary increment.
For Harminder Gill and Balvinder, while they have a savings plan in place and are aware of the importance of planning for retirement like most parents with young children, they currently give more emphasis on building their children’s education funds.
For their retirement, Ooi recommends that they see a professional financial advisor to review and evaluate their financial needs. Knowing the type of retirement lifestyle desired and retirement number is crucial.
Once the couple know their retirement number, a professional can then work out a strategy to ensure they realise their dreams.
Ooi believes that Kelvin Boey and Karin Lim may be the most prepared financially among the couples for their retirement, given their age. Her advice is simple – that the couple review their needs annually.
Every investment has a risk, so it is important to have annual reviews which will help ensure that their savings and investments meet their retirement goals.
The biggest hurdle to achieving their retirement number is inflation.
Investing in a vehicle such as PRUretirement accumulator is an added advantage as it provides capital protection with potential for higher returns.
(*Estimated for a 28-year-old male, non-smoker, who retires at age 55 and enjoys 15 retirement years.)
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