Make Retirement Savings Your Priority

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Make Retirement Savings Your Priority

When it comes to planning for their retirement, women face some unique challenges and risks that confront them. It is crucial to be aware of these challenges and take action to address them now. What are some of these unique challenges and risks that women face, when it comes to planning for their retirement?

Women are more likely to have their careers and work life interrupted due to starting a family, taking time off to care for family members. There is however a cost to take time off from work and restarting their career.
- Stopping work to meet their family obligations will mean foregoing their monthly income and contributions to their retirement.
- Looking after family obligations may also require financial support, draining existing savings to meet their current needs, reducing any savings earmarked for retirement.
- Coming back to work and restarting their careers at the same salary levels and positions where they have left off inadvertently makes them earn less which lowers EPF contributions and the ability to save more.
Women generally outlive men, giving rise to longevity risks. The Malaysian Department of Statistics mortality statistics shows that women on average live 5 years longer than men, with a life expectancy of 77 years. As such women must face up to the prospect that they may outlive their spouse and retirement savings
Women who are divorced and widowed may face additional pressure on retirement savings as they will have to deal with living on their own and also have to look after their children as well.

You need to get started and think about what you will need to do to have adequate and sufficient retirement income.

Aim to have a total retirement nest egg that generate 2/3 or 67% of your projected last drawn salary, to maintain your living standards and lifestyle into your retirement;
Plan to have adequate savings to generate sufficient income to last you for a minimum 20 years retirement, to take care of your longevity risk

Research shows that you will need to save an additional minimum 10% of your monthly income into a voluntary retirement scheme such as the Private Retirement Schemes (PRS), to make up the minimum 33% monthly savings target to continue your existing living standards into retirement.

In view of the unique challenges and risks faced by women, making retirement a priority is a must for all women. And this does not mean putting everything else second. Giving your retirement priority will in the end benefit everyone in your life, particularly your future self as it is a conscious decision to be financially secured and independent when you retire.