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Importance Of Financial Planning In Malaysia

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THE AWARENESS OF FINANCIAL PLANNING ON THE RETIREMENT PREPARATION IN MALAYSIA

1.1 Background
1.1.1 Retirement Planning as the financial preparation
Retirement planning is not a mandatory for the working individual, it is an option for the personal financial management and preparation for their post-working life. In Malaysia, the retirement saving start growing concern among the employee and financial planning keeps going to be the first priority subject matter for both public and private policy makers. Numerous strategies of policy effort that have been taken to expose the essential of financial planning and saving for their golden retirement years. These policy makers also take the opportunity by offering many products or retirement scheme …show more content…

Most of the employee’s public sector in Malaysia chose the government pension plan and they have no worries as they will receive monthly pension which is half of their last salary. While for those who in the private sectors are mandated to save 20% from their monthly income in the Employee Provident Fund (EPF). The government policy makes it compulsory to set a minimum amount of their salary into Employee Provident Fund (EPF) for all its working population. This action is importance to ensure that workers have good financial saving as the preparation to cover after their retirement. This cover includes their place to live, medical bills, money to cater for day-to-day expenses and for the emergencies. The planning for the …show more content…

The aging phenomenon has turned Malaysia into an aging society currently with 6.3% of its population being elderly people (over 60 years old) in 2000 and estimated at 7.4% in 2010 and 9.9% in 2020 (Taha and Mat, 2003). This phenomenon has become serious issue especially for the low and medium- income employees due to people over 60 years old need better medical attention and it is need a high cost of money. Therefore, financial management for the retirement saving should be top priority before these problems becomes more serious and getting

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