EPF.... lets put a point here..???
Assalamualaikum w.b.t.,
Refering to below article (red color highlighted), why this happened? After retirement, EPF saving not enough for your future needs?
If we don't have extra money to make additional saving or investing then surely we stuck in future living depression.
Hidden voice from EPF said, actually EPF can give dividend more than 5% or reaching beyond 10% yearly, but why until now we only received 5% or below??? Do ghost hand chained EPF to give more benefit to their depositors or profit missing in magical action of ghostsssss??? I believe majority of EPF depositors are from private sectors.
Do you believe, if our income tax is lower than we can save more? I believe so...
But what happen then, if income tax not even being reduced but another tax is introduced such GST bundle with so called "subsidy reduction programme" and couple with goods/service price hike up? How much can you save monthly for your retirement?
I still blind with so called high earn income.... what I will still prefer lower tax and lower good/service price and lower inflation. It will save me even better then uncertain high earn income... since the paper money is still just paper...
Wallah hu 'alam.
___________________________________
QUITE a few Malaysians would have pumped their fists into the air upon hearing of the plans to increase the retirement age of private sector workers.
That group would certainly be those thinking that their working life was coming close to an end and the prospect of having five or more extra years added into their careers and earning potential now would certainly be a windfall for them.
The fact remains that retiring at 55 in today's world seems a waste. The mortality age for Malaysians has risen quite a bit from when the Employees Provident Fund (EPF) Act 1951 was first passed. At that time many Malaysians were not expected to live past 55.
The retirement age in Indonesia and Thailand is 60 and any high-income economy, in which Malaysia aspires to be, certainly has a retirement age beyond 60.
Today, with better medicine, diet and exercise, the average life of people has increased. A longer life based on a finite and short working career certainly would put a strain on the finances of many a retiree.
The EPF says 73% of contributors have less than RM50,000 saved while only 17% have over RM100,000 at the point of their retirement. Add in the ever-growing costlier living costs, that amount of money will not last long and many do end up broke just a few years after retirement.
Another reason why the EPF might suggest an extension of the retirement age is that Malaysia is now a greying country. Baby boomers will retire in ever increasing numbers and the money will be withdrawn from the EPF and that will be to the detriment of the current group of savers and the overall equities and securities markets where the fund is a major investor.
Also, the more workers a country retains as the population ages the more the benefit to the economy.
But the decision to increase the retirement age in my estimation will boost the economy in the longer term.
Extending the retirement age will act as a stimulus for the economy and that will be from a group of people with the highest earning power too.
Based on life cycle hypotheses, people tend to spend more during the early age of their careers and save more as retirement approaches. Now that they know retirement is postponed for five more years at least, those people who might be thinking of building a nest egg have the opportunity to spend.
Spending more now will certainly be a boost to domestic consumption which is a main driver of growth.
People will now look to buy a new house, upgrade their cars, do some renovations to their homes or spend on whatever else they want on now knowing that they have the flexibility without worrying about the end of their careers.
Extending the retirement age will not mean people cannot retire early. Anyone can retire today if they wish to but surveys from the United States have shown that people will choose to retire later if the retirement age is extended.
Should the retirement age of government employees be increased to 60, it will be illogical to have separate retirement ages for the public and private sectors.
It will mean having a person at a top salary bracket serve an extra five years instead of giving that person a golden handshake, pay him 50% of his salary for the rest of his life, and replace him with another person at the salary of the retired person. There are also other benefits the Government can save on such as healthcare bills.
Young people who might be worried about not moving up the ladder or getting a job should not. Should the economic transformation programme gain traction, that will mean 3.3 million new jobs over the next 10 years.
Add in the fact we are technically at full employment and have more than 2.3 million legal and illegal foreign workers at least, jobs will be there as the economy grows.
Company CEOs may think that extending the retirement age will mean they are stuck with the deadwood in the organisation.
The fact, however, is deadwood will inevitably exist in every organisation. If CEOs can miraculously be given one chance to remove all unproductive workers, you can bet others will emerge at later years. It's best that talent management is exercised to ensure such workers are minimised at all times.
Deputy news editor Jagdev Singh Sidhu thinks those who have planned for their retirement will now look to spend a bit more.
Refering to below article (red color highlighted), why this happened? After retirement, EPF saving not enough for your future needs?
If we don't have extra money to make additional saving or investing then surely we stuck in future living depression.
Hidden voice from EPF said, actually EPF can give dividend more than 5% or reaching beyond 10% yearly, but why until now we only received 5% or below??? Do ghost hand chained EPF to give more benefit to their depositors or profit missing in magical action of ghostsssss??? I believe majority of EPF depositors are from private sectors.
Do you believe, if our income tax is lower than we can save more? I believe so...
But what happen then, if income tax not even being reduced but another tax is introduced such GST bundle with so called "subsidy reduction programme" and couple with goods/service price hike up? How much can you save monthly for your retirement?
I still blind with so called high earn income.... what I will still prefer lower tax and lower good/service price and lower inflation. It will save me even better then uncertain high earn income... since the paper money is still just paper...
Wallah hu 'alam.
___________________________________
Thursday September 29, 2011
Higher retirement age will benefit the economy
MAKIING A POINT By JAGDEV SINGH SIDHU
QUITE a few Malaysians would have pumped their fists into the air upon hearing of the plans to increase the retirement age of private sector workers.
That group would certainly be those thinking that their working life was coming close to an end and the prospect of having five or more extra years added into their careers and earning potential now would certainly be a windfall for them.
The fact remains that retiring at 55 in today's world seems a waste. The mortality age for Malaysians has risen quite a bit from when the Employees Provident Fund (EPF) Act 1951 was first passed. At that time many Malaysians were not expected to live past 55.
The retirement age in Indonesia and Thailand is 60 and any high-income economy, in which Malaysia aspires to be, certainly has a retirement age beyond 60.
Today, with better medicine, diet and exercise, the average life of people has increased. A longer life based on a finite and short working career certainly would put a strain on the finances of many a retiree.
The EPF says 73% of contributors have less than RM50,000 saved while only 17% have over RM100,000 at the point of their retirement. Add in the ever-growing costlier living costs, that amount of money will not last long and many do end up broke just a few years after retirement.
Another reason why the EPF might suggest an extension of the retirement age is that Malaysia is now a greying country. Baby boomers will retire in ever increasing numbers and the money will be withdrawn from the EPF and that will be to the detriment of the current group of savers and the overall equities and securities markets where the fund is a major investor.
Also, the more workers a country retains as the population ages the more the benefit to the economy.
But the decision to increase the retirement age in my estimation will boost the economy in the longer term.
Extending the retirement age will act as a stimulus for the economy and that will be from a group of people with the highest earning power too.
Based on life cycle hypotheses, people tend to spend more during the early age of their careers and save more as retirement approaches. Now that they know retirement is postponed for five more years at least, those people who might be thinking of building a nest egg have the opportunity to spend.
Spending more now will certainly be a boost to domestic consumption which is a main driver of growth.
People will now look to buy a new house, upgrade their cars, do some renovations to their homes or spend on whatever else they want on now knowing that they have the flexibility without worrying about the end of their careers.
Extending the retirement age will not mean people cannot retire early. Anyone can retire today if they wish to but surveys from the United States have shown that people will choose to retire later if the retirement age is extended.
Should the retirement age of government employees be increased to 60, it will be illogical to have separate retirement ages for the public and private sectors.
It will mean having a person at a top salary bracket serve an extra five years instead of giving that person a golden handshake, pay him 50% of his salary for the rest of his life, and replace him with another person at the salary of the retired person. There are also other benefits the Government can save on such as healthcare bills.
Young people who might be worried about not moving up the ladder or getting a job should not. Should the economic transformation programme gain traction, that will mean 3.3 million new jobs over the next 10 years.
Add in the fact we are technically at full employment and have more than 2.3 million legal and illegal foreign workers at least, jobs will be there as the economy grows.
Company CEOs may think that extending the retirement age will mean they are stuck with the deadwood in the organisation.
The fact, however, is deadwood will inevitably exist in every organisation. If CEOs can miraculously be given one chance to remove all unproductive workers, you can bet others will emerge at later years. It's best that talent management is exercised to ensure such workers are minimised at all times.
Deputy news editor Jagdev Singh Sidhu thinks those who have planned for their retirement will now look to spend a bit more.
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