Never tire of saving for retirement

PETALING JAYA: At 68, CK Tan is happily retired, having left his job as a maritime consultant 13 years ago.

He looks after his grandchildren and tends to his garden.Tan has no problems with money. His pension fund is growing, thanks to the passive income from his many properties.

“I invested in the properties before my retirement and true enough, that is helping my family and I live more comfortably now.

“Property prices have soared and I’m thinking of selling one of the properties given the high offers I have received,” he said.

Tan, however, may be among the exceptions. Many retirees have lost their retirement funds to scams and ill-conceived investments.

Financial advisers warn that schemes that seem “too good to be true” are very likely to be just that – scams to con people out of their money.

They suggest that retirees or those nearing retirement consider investment portfolios instead.

Malaysia Literacy in Financial Education Association chairman Amy Seok said retirees could consider dividend-paying stocks.

“These offer a regular income stream (to retirees) and are issued by governments or corporations, which pay interest to bondholders on a regular basis.

“Mutual funds can also be considered as they offer retirees exposure to various asset classes like stocks and bonds,” she said, adding that they were managed by professional fund managers who select and manage investments on behalf of investors.

Real estate, Seok said, would be another good investment option.

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“It is important to note that no investment option is completely risk-free. However, with thorough research and by working with professional financial advisers, retirees can minimise risk exposure.

“Returns are also subject to factors like market conditions, economic trends and the performance of individual investments,” she said.

Seok added that it was important for retirees to make their money “work smarter”.

“Diversifying investments helps reduce the overall risk of one’s investment portfolio,” she said.

For those likely to retire in five to 10 years, she said they should maximise their contributions to their retirement savings accounts and seek professional advice for their retirement planning.

“The goal is to balance the need to grow retirement funds as well as protect them,” she said.

It is also important to draw up a budget and understand one’s income and expenses.

“Identify your income sources such as retirement benefits, pension plans and investment income. Consider reinvesting a portion of your (withdrawn) lump sum amount in various investments.“Healthcare expenses should also be planned for, alongside paying off debts. A well-thought out retirement plan not only ensures the funds last longer but guarantees financial security,” Seok said.

Fund manager Danny Wong also warned against potential deals that seem too good to be true.“There is no such thing as a high return with guaranteed payback. In such cases, always check with licensed professionals,” said the chief executive officer of Areca Capital Sdn Bhd.

He added that investment offers must come with the disclosure of risks associated with potential returns.

“The key principle is: if the offer is so good, why is it still available to me?” he said.

Last Friday, Deputy Finance Minister Datuk Seri Ahmad Maslan said 22,000 people lost RM850mil to scammers in the past year, noting that there were many pensioners among this group.He said scammers seemed to know when pensioners would receive gratuities and that people should be wary of sweet promises by strangers.

Wong said those in investment scams often offered benefits and advantages of certain services.

“The ‘promoter’ may use valid and legitimate cases to support their claims. When further interest is shown (by the target), the promoter will start showing returns and promises, while also asking the customer not to share it with anyone as the offer is exclusive.“Always refer these cases to licensed professionals to verify their authenticity.

“One can check with licensed fund management companies, banks or even authorities like Bank Negara or the Securities Commission,” he added.