When you first join the workforce, retirement seems very far away in to the future. But, ideally, planning for retirement should take place at the start of your career when you are in your 20s. Whilst this may seems an arduous task for the working youths with the multitude of commitments and challenges, it is doable and achievable. The best advice is to start savings as early as possible and youths today are given the opportunity to save in the voluntary Private Retirement Scheme – PRS. The PRS for Youth comes with the special added benefit of RM1,000 incentive!
Retirement investment objective:
- Growth – primary focus is to generate compounding and accelerating capital growth by investing in equities.
- Growth & Income – balanced requirement for compounding capital growth as well as income by investing in mixed assets i.e. equities and bonds/fixed income instruments.
- Income – primary focus is to general regular income stream by investing in bonds/fixed income instruments.
- Less than 40 years , you may want to focus on capital growth
- Between 40 – 50 years, you may want to balanced capital growth and income
- Above 50 years, you may be focusing on generating sustainable income
Personal risk profile:
- Aggressive – you are able to withstand market volatility and capital losses
- Moderate – you are looking at balancing market risk and returns
- Conservative – you are unable to withstand capital losses