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If our grandparents and parent
didn’t need to plan, why do we? The world has changed tremendously and so has
our lifestyle. Do you recognize these trends and how it affects you?
Reason
1. You are going to live longer
Life expectancy worldwide and
in Malaysia is increasing. Due to improvements in healthcare today, a baby boy
born in 2004 is expected to have a life expectancy of 71 and a girl, 76 years,
in Malaysia.
Reason
2. You will spend more on
healthcare
As you live longer, the total
cost of medical care over your lifetime will also be more. Diseases that
probably killed a person are now treatable but expensive. You also need to plan
for long term care after retirement.
Reason
3. To enjoy retirement
You will retire longer. If you
and your spouse retire at 55 and live to 75, you’re going to eat 43,800 meals in
retirement. Excluding inflation, if each meal costs RM 5, you’ll spend RM
219,000 on food alone.
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Reason
4. You have more ways to spend
your money
Not too long ago, there were no
theme parks, satellite television, home theater systems, mobile phones, PDA’s,
play-station, private medical care, internet, shopping malls, designer coffee,
tolls, etc. to drain our income.
Reason
5. You travel a lot more.
You spend more on travel than
you used to for common activities like work, shopping and schooling. It is very
common to travel 60 km or more in a single day.
Reason
6. You will marry later and
have children later
Nowadays, it is very common to
see retirees with children still studying. You have to build an education fund
to cater after you no longer earn an income.
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Reason
7. Costs of raising children is
higher
Cost of raising children will
rise. Children clothes, food and medical care cost more than adults. You also
pay for music classes, ballet class, children camp, language development,
tuition, and more.
Reason
8. Your children will spend
more time in university
10 to 15 years ago, a diploma
is sufficient to get a good start. Today many continue on for their masters’ or
Phd. Instead of them working, you will have to subsidise their food, lodging,
travel and study fees.
Reason
9. Inflation
Inflation raises the cost of
products and services. You my outlive your money, if your investments do not
grow at least at par with it.
Reason
10. To pass wealth to the next
generation
This is increasingly difficult
because it is likely that you will outlive your assets and have nothing to leave
to your children. In many cases, the transfer of wealth is going backwards.
It is for all these reasons
that you need to be financially sound. Do it before it is too late.
Go to top
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