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Retirement Piggy Bank

Putting money aside to save for retirement can be very challenging, especially when juggling monthly commitments.

We were watching our spending very closely so we managed to put aside some money for emergencies, a rainy day, and/or retirement. Building a retirement piggy bank (retirement fund) is the hardest when there are so many distractions – car needing repairs, house requiring fixing, need a new laptop or mobile phone, etc.

If you are keen to know the financial planner’s tool to calculate your retirement fund, here are links to a few that I found (and I’ve used them to simulate my own retirement fund amount):

There are many similar calculators, so use any to have a rough idea of how much you need to retire. It would be great if you have a surplus but if you don’t, then it is never too late to start planning to close the gap. Do the calculation in the earlier years so that you can get a headstart.

Our initial spend… just for the land

When we decided to purchase the land, we only had a budget of RM100K to RM150K, and the lesser the better. We wanted to keep the investment to a minimum. But in the end, we put in slightly more than double that amount to purchase the land of our dreams. The decision was not easy because it is a big amount for us to fork out.

The subsequent spend

Buying the land was the first step in our retirement dream, so that was the beginning. We researched and found out that we also needed an approximate RM10-20K to clean the land, build terraces, waterways, roads, etc. To build a house, we are looking at spending between RM80 to RM120 per sq ft, depending on what we have in mind. We also need to engage an architect, quantity surveyors, builders, etc to start planning what we want to build. Just off my head, I estimate RM200K for the build.

Tips on starting a retirement piggy bank

#1 Put aside some money consistently

If you are not disciplined enough to put money aside consistently, do something that requires you to make a monthly payment. In 2016, that’s what I did, I bought a property. I told my late mum that there was no way I could save money so I need to force myself to do it. I bought a property with a monthly repayment of RM2K as part of retirement planning. It is a good start for me, albeit a bit late.

#2 Save every penny

Do you actually need that extra handbag or shoe? Sometimes even the smallest thing can really add up, for example, like do I need an extra plate just because the old one doesn’t match the overall decor? I noticed I also waste a lot of cash on buying small stuff that I eventually find that I don’t need. The value of all these items added up, is a huge amount. Imagine if these were put in your retirement fund!

#3 Invest

As I’ve mentioned, I’m no investment guru but you definitely need to diversify and invest your money. Whether it is in stocks, business, crypto, NFT, asset, or anything other stuff, do it. Make sure it fits your investment appetite and that you are fully aware of the risks that come with each investment.

#4 Additional source of income

If you are a salaried worker, you may have a ceiling for your fixed-income earnings. Find something that you can do to supplement your income without disrupting your full-time job. Depending on your skill set and what you are will, there are many opportunities to earn that extra buck. Don’t do anything that is illegal or borderline illegal. It is not worth it. Also, pay taxes for any additional income, after all, taxes help the country to develop and grow. If the sum gets big, engage an accountant and tax consultant to make sure that you fulfill your tax obligations.

#5 Keep a planner

A retirement planner is essential to keep track of where you are. I like to keep things written because writing them down is a commitment. [Coming soon – check out my retirement planner!]

Keep your eyes on the goal

It is so tempting when your savings start bloating. An exotic trip, a new car, and the list go on. Stay focused on the goal and don’t deviate from your plan.

Next, I’ll be talking about the laundry list for the land. If you are also thinking of buying land, you might be keen to learn how we drill down to a few key criteria.