PETALING JAYA: A financial planning consultant has warned that most Malaysians risk facing financial problems when they retire because they don’t plan for the eventuality or plan poorly.
“They will have issues in terms of cash flow,” MyFP Services Sdn Bhd founder Robert Foo told FMT.
Many would suffer because of their lack of financial literacy, he said. They would be burdened with debt, become susceptible to victimisation through fraudulent financial schemes or get confused over bank products, insurance policies and other investment products, he added.
“They face these sorts of financial issues because most retirees don’t have a strategy and they have poor financial plans,” he said.
According to the fifth Malaysian Population and Family Survey, which was carried out in 2015, most senior citizens in Malaysia have poor retirement savings and low financial literacy.
The survey report showed that 42% of senior citizens had zero savings. It said most of them didn’t have enough money to save when they were working and a significant number did not bother to save because they thought they could depend on their children.
However, the report also said most senior citizens received strong support from their families.
The survey, covering more than 10,000 households, is conducted every 10 years by the Women, Family and Community Development Ministry. Its purpose is to monitor population and family system changes.
Foo urged Malaysians to make strategic financial plans for their retirement. They should “strategise their resources,” he said.
“You need to consider your lifestyle choices for your retirement, such as preferences for housing, travel, and entertainment,” he added. “You should figure out what you want and how much you need during the remaining part of you life.”