Just drop in to share my own method of financial planning/management.

The financial basic that I understand and following were these formulae;

Basic Salary = 100%
EPF Cut = 11%

Basic Salary (Pay Cheque)(Ignore PCB and SOSCO)= 89% Saving now = 11% from EPF

a)Basic Salary (Pay Cheque) (Ignore PCB and SOCSO)= 89% Saving now = 23% from EPF (+12% boss)

Average age to start earning = 20yrs old

Average age of retirement = 55-60 yrs old (Lets take 60 for example)

b) Total working years = 40 yrs

If we are lucky, we may live up to = 80 yrs old

c) Years of jobless after retirement = 80 yrs old – 60 yrs old = 20 yrs old

d)Compare b) and c) 20yrs / 40 yrs is 50% of the time, hence at least 50% of total earning of b) will be sufficient to sustain 20 yrs of jobless

Looking back at a) we already have 23% of saving which is force-saved into a locked account until age of 55 which is then possible for withdrawal.

So what we need to do now is to make up our mind set to gather another 27% which is d) 50%-23%(a)) = 27% saving that will get us to a safe side.

27% is a lot for many of us, including me, but I understand that many of you had already accomplished this which is very admirable.

27% of a average earner of RM 2500 is RM675.


Of course if you are an economist, you may go deeper into economy by considering the

Positive Factors;

Return of Investment (Properties and savings)
Child which will bear our cost of living when then grow up (when we reach age of 60-80)
Need of spending reduced significantly due to age, entertainment, burden, commitment and etc
Part time works, rental or business which generate income at age after 60.
EPF withdrawn for purpose like buying properties or unit trust (Properties is investment, so the money is not lost but allocated elsewhere)

Negative Factors;

Inflation
Need increased due to child education burden or diseases (Unforeseen Circumstances)
Uncleared debts
Many more which we cannot foresee

Because many people cannot see how much they should be saving and many people just recommend 10% or 20% without proper reasons, that is why i share this out just to bring in some ideas.

But it is the safest to save up to 27% from basic earning which will put you on a safer side of financial status.

If you have more money, then save more. No harm.

My 2 cent.

Regards,
Isendir1

I do not really understand you this, but if i am right, from my previous thread "Average age of retirement = 55-60 yrs old (Lets take 60 for example)"
Most people retire at age of 55 and i took 60 due to some delaying factor which is very common.
For example
- extend the retirement age
- contract worker, usually applied and varies in different company
- own business at age of retirement

p/s no one know what will be the status of the law on EPF 40 years later. Maybe better maybe worst. The government now will not necessary be the same in future. This is assumption only.

"Part time works, rental or business which generate income at age after 60."
- Many people work in a company early and climbed up to top management. Hence at age 40 and above, you seldom find another job. You are established high ranking employee which is permanent.
- Many has build up part time business which is also an income and you still can contribute to EPF. I know many small sdn bhd MD do that.
- I am sure at age 40 and above, if come to the state of discrimination and forced early retirement, you still have properties and other investment which is passive income, do you?

- Some may be transfer to unit trust, others to buying properties. But this $ is not lost, it is still rolling into bigger snow ball. How can it be gone?

Sounds fair to most of the world, but Malaysia,

http://thestar.com.my/news/story.asp?file=...8451&sec=nation
http://www.malaysianmirror.com/voices-of-t...-60-sounds-good
http://www.encyclopedia.com/doc/1P1-130437889.html
http://www.accessmylibrary.com/coms2/summa...86-34564720_ITM

You have your point of being cautious.
I am just sharing my part of financial planning.
Just i am able to save without living like jack the dull boy. i can spend as i like with constant % of saving everymonth.

In fact, i am SUNNY

Hit financial goal the year for a meal reward like a bit too torturing.... I can save around RM1k a month but still spending money for several tgi fridays, pizzahut, cafes, movies and clubbing. I earn bout less than 3k for basic too. I am 24 this year, and i think my youth is some how i cannot retrieve back when i am rich...

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Added on June 12, 2010, 12:25 ambtw, who lable clubbing as act of evil, please hands up?

This post has been edited by Isendir1: Jun 12 2010, 12:25 AM

Great! Just wish that all of you LYN girls and guys can save smartly with ease but not tru struggling.