22 March 2013

Cost of Living in Malaysia going up, up, up!

Certainly the cost of living in Malaysia is going up all the time (as do all countries in the world). It is the natural progression in a vibrant economy. However, it needs to be check by the government. They would need to come up with policies to improve the people's income and cap the inflation rate as much as possible.

Yet, we all know there are so much leakages and corruption, that many of the monies that should be in the hands of the people end up with only the few of the rich with insider business connections. Leaving the rest of the people without a good income source. With uneven income and wealth distribution, the inflation rate would certainly burden the lower to middle income group.

And when it comes to retirement, we Malaysians are rather worried how far our savings to would take us into our ripe old age until we kick the bucket and leave some amount for our next generation.

This news report from HSBC / The Edge Malaysia sums up the concern and issues of many of us. Even for me, I'm not saving enough. And there are many expenditure to take care leaving me with hardly any balance leftover for savings.

At the same time, the Fix Deposit rate is woefully inadequate and under matched against even the official CPI rate. Our real savings is getting smaller when the cost of goods go up faster than our savings interest.

Recently I read that one country in Europe (forgot which country), the banks actually impose a tax on your savings! Now that is too much! It means they are discouraging savings and want the people to spend! Probably to stimulated their stagnant economy. But it would also mean when the people retire, they would have no money.

Such is the topsy-turvy economy of the world!


Malaysians concerned about outliving savings
By Charlotte Chong

KUALA LUMPUR: A recent survey by HSBC Bank Malaysia Bhd found that, on average, Malaysians expect to live 17 years in retirement but that their savings would only last 12 years.

The future of retirement: a new reality report is based on a survey of over 15,000 people in 15 countries.

It highlighted that 43% of Malaysians felt that they were not adequately prepared for retirement, with 10% taking an even bigger risk of not being prepared at all.

HSBC head of retail banking and wealth management Lim Eng Seong said people are still running the risk of living long beyond their retirement savings.

In a statement yesterday, he said: “Many Malaysians have begun to place importance on retirement planning and savings.”

“This is an improvement from the last survey in 2011 where 68% of respondents were worried that they would not be able to cope financially in retirement.”

The study also found that Malaysians understood the importance of preparing for retirement from a relatively young age with the average age for when they started planning financially at 34.

When asked how much money they felt was needed to live comfortably, both now and when they retired, about 81% of the respondents said a sensible proportion of “working age” income would be required for a comfortable retirement.

Meanwhile, 68% of the respondents cited financial hardship around retirement as their most common concern whereas 59% of them were concerned about poor health around retirement.

The survey also reported that 59% opted for the longer-term goal of retirement with only 37% choosing to save for the short-term goal of a holiday.

This article first appeared in The Edge Financial Daily, on March 22, 2013.


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