You need to know the signs that indicate that you will be broke when you retire.
There are no secrets to success. It is the result of preparation, hard work, and learning from failure Colin Powell
Currently I tend to live from paycheck to paycheck, I need to dig deeper and see if I use money for the right purposes. I may allocate at least 30% of my income to savings or investment and that is alright as long as I are allocating enough money to sustain life. I might looking for 2nd income later on.
However, many working millennials and younger generation employees tend to practice a
YOLO - You Only Live Once lifestyle causing them to spend recklessly / impulsively on things without considering their financial appetite.
I should consider the salary increment, benefits package and other remuneration enhancement will be getting in the company next time.
The golden rule is, if you have not received a 5% salary increment (at least) on an annual basis to beat the inflation rate which is at an average of 3.8 % (rising or low?) then you will hardly save money for yourself in the future.
Consult with superior or employer and ask what it takes to be eligible for the increment you deserve. Up-skill and be willing to take on the challenge to learn more while working on daily tasks.
Do not rely on a single source of income (as been mention before). Learn new skills such as graphic design, translation or drive as a ride-sharing part-timer to take advantage of the additional income you can earn through the digital world. Freelance is the best to growth skill of social and getting know the best way of how to get job done!
Always be on the lookout for a better opportunity if current employer cannot afford to pay more than the market, aim for the best company in the market and embrace change. But before that, I must consider the full picture including career advancement, benefits package and other allowance may be getting from the current job.
Have a look on ‘living wage’1 concept by BNM which is the minimum income needed for a household to participate in society, the opportunity for personal and family development and freedom over severe financial stress. The central bank said the living wage concept can be used to guide policymakers and employers on what is acceptable as minimum living standards2.
Remember when EPF3 has stated that at the minimum, a member must have RM228,000 at age 55 ? Guess what, it is shocking that only 18% of its members have that amount in their accounts.
I have witness and saw many of the elders are regret not saving more during their work life to sustain their retirement life. I would like to hightlight :
As mentioned by Private Pension Administration (PPA), we should save 33% of our monthly income to ensure the sufficiency and sustainability of retirement savings.
It is ideal to be debt-free before retire at the age of 55. Be consistent in clearing debts and think carefully before taking on a new one unless it is really worth it.
Eilyn Chong and Farina Adam Khong. (2018, March). Bank Negara Malaysia (BNM). The Living Wage: Beyond Making Ends Meet. http://www.bnm.gov.my/index.php?ch=en_publication&pg=en_work_papers&ac=62&bb=file. Mirror : https://robbinespu.github.io/assets/docs/AR BA4 - The Living Wage Beyond Making Ends Meet.pdf ↩
(2018, March 28). NST - Bank Negara introduces ‘living wage’ concept. https://www.nst.com.my/business/2018/03/350398/bank-negara-introduces-living-wage-concept ↩
Jomo Ks. (2017, Oct 25). The Star - Most Malaysians cannot afford to retire. https://www.thestar.com.my/business/business-news/2017/10/25/most-malaysians-cannot-afford-to-retire. ↩