As a simple example, a 35-year-old employee who contributes RM3,000 for 10 years is fully guaranteed to enjoy a total benefit of RM65,475 after the retirement age of 55, paid in equal annual income over 15 years. That is more than double the total capital outlay of RM30,000."

Lets me do some analysis with time value of money concept..

eg, FD rate 3.15% p.a, start at Age 27, RM3k per year, 10 yrs.
the calculation should be;
FVIFA method, RM3,000x(1.0315^10 - 1)/0.0315=RM34,630
which mean every year u deposit 3k in FD, 10 yrs later(age 37) u can get RM34,630.

age 37 to 70;
assume u keep RM34,630 in FD for 33 yrs and 3.15%,
FVIF method, RM34,630x(1.0315^33)=RM96,369

At age 70, u can get RM96,369 from FD


Great Retirement Plan RM65,475, divide by 15 yrs(age 55 to 70) = RM4,365 p.a
assume reinvest in FD for 15 yrs
FVIFA method, RM4,365x(1.0315^15 - 1)/0.0315=RM82,083

assume u get 26% tax return for 10 yrs or RM780 p.a and 3.15% applied for interest;
FVIFA method, RM780x(1.0315^10-1)/0.0315=RM9,004
age 27 to 37, ur tax return is RM9,004

assume reinvest in FD at 3.15%p.a until age 70
FVIF method, RM9,004x(1.0315^33)=RM25,056

Total return for Great Retirement Plan at age 70 = RM82,083+RM25,056 = RM107,139


Comparison;
3.15%p.a FD(RM96,369) VS Great Retirement Plan(RM107,139)
with assumption start at Age 27 and 26% tax bracket

FD's advantage is flexible(can withdraw anytime) and protected by PIDM.

Great Retirement Plan can enjoy extra RM10,770(RM107,139-RM96,369) for 43 yrs(70 - 27).
Disadvantage is not flexible and T&C applied.


Conclusion;
Would you willing to pay RM10,770 for 43 yrs flexibility and uncertainly?
It is your choice..
Have a nice day ^^


Read more: Great Eastern rolls out the Great Retirement Plan http://www.btimes.com.my/Current_News/BTIM.../#ixzz2JKcEdIsS

This post has been edited by rtgs: Jan 29 2013, 03:41 PM