Retirement Piggy Bank

Saving up for retirement can be challenging when there are more important things to save up for – how we pooled our money.

Starting a retirement piggy bank is difficult. There are just so many distractions along the way – car needing repairs, house needing fixing, need a new laptop or mobile phone, budget for an in-house helper, and the list goes on. There is also the temptation for instant gratification – a brand new car, a holiday abroad, or a new piece of furniture.

We were very careful with our finances so we individually saved up whatever we could. Hubby’s mantra is to save up, be thrifty, not replace anything not broken, and generally not spend what is not needed. So we each had some saving set aside for our retirement – and it came in handy when we put some serious thoughts in it.

Our budget for our retirement land

We decided that we wanted to retire in the countryside for a more laidback lifestyle and possibly less pricey than living in the city. So when we decided that we needed a land to kick off the retirement dream, we had a budget of between RM100K to RM150K, 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 we knew that there will be additional spend we needed to think of. We researched and found out that we also needed an approximate RM10-20K to clean the land, build terraces, drainage, roads, etc. (NOTE: We ended up spending way much more than that!) To build a house, we are looking at spending between RM80 to RM120 per sq ft (at current prices), 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 that it would cost approximately RM200K to build a small house on the land.

Tips on starting a retirement piggy bank

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. You can also put money aside via other investment vehicles.

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 the retirement fund.

Invest

As I’ve mentioned, I’m no investment guru but you definitely need to diversify and invest your money. Make sure it fits your investment appetite and that you are fully aware of the risks that come with each investment.

Additional sources 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. Use up time after your working hours, public holidays and weekends for your side hustle. It may be writing a book on Amazon KDP, selling your photographs on stock photography websites, writing an article for a website, or just about anything you can think of.

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.

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. I like to Bujo (Bullet Journal) planners as it provides you with the flexibility to create columns to suit your preference. If you are not a physical notebook person, you can also do your planning in a digital planner.

Keep your eyes on the retirement goal

It is so tempting when you see your retirement piggy bank grow. 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.