Do you know how much savings is enough for you to retire in Malaysia? Or do you even think before about your retirement?

No? Then here’s why is it important to think about your retirement.

Importance of Knowing Your Retirement Amount

The retirement amount here refers to how much you need in order to retire comfortably in the coming future. No matter you want to retire in the ’30s, 40’s or 65, it is better to start getting ready for your retirement. Like they always said, the earlier you start to plan, the easier you get to reach your retirement goals. Especially the power of compounding.

1. Check whether you are on track.

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First, you need to have the S and M out of SMART for your retirement goals. If you never heard of SMART, SMART is a tool to help with goal setting. S refer to specific and M refer to measurable.

By setting desire figures as your goals, it gives you the direction to plan for your retirement goals. Most importantly, your goals are in numbers, and numbers are trackable. You can easily evaluate your progress and make amendments to your retirement plan.

Instead of setting your retirement goal as “I want to retire at 55 years old with my spouse in Johor”, it is really hard to check your progress. The goal can be set as”I want to save RM 800k by 55 years old to retire with my spouse in Johor”.

2. Plan for retirement

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A goal without a plan is just a wish. Don’t let your retirement become a wish. By having a number in mind, it is easier for you to plan for what to do in order to achieve the desired amount.

Without a number, it is hard to plan for your retirement. “I want to retire by 55 years old.” You will reach 55 years old, it is just a matter of time. But, you are unable to plan for it without having specific and measurable goals.

From the previous example, RM800k is your desired retirement amount. Now you can start planning, how long until you reach 55 years old and how much you need to save in order to reach RM800k.

Do you need to reduce your monthly spending in order to save enough every month? Or are your investment portfolio built for retirement is bringing enough return every year in order to reach RM800k by 55 years old? Will there be any financial commitment after 55 years old and is the RM800k covers the payment of your debts?

3. Ensure you have sufficient to retire.

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We always feel like retirement is still years away, yet time flies without us noticing. Knowing your retirement figures is to ensure we do prepare enough in our retirement account or portfolio to live comfortably when we retire.

Setting figures indirectly reminds you to save enough for your retirement. As you calculate the amount, it gives you a picture of how much you need for retirement and what is your current progress. Are you on track? Or are you falling behind schedule?

So, exactly how much is enough for retirement in Malaysia?

There are no exact figures that fit everyone. One amount that is more than enough for one individual might be an amount that is hardly enough for another. There are a few factors that affect the desired retirement figures of an individual.


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Obviously, lifestyle is a big factor. Everyone lives differently. Start to pay attention to your lifestyle spending and have in mind rough figures of how much you spend every month or every year. You need these figures to estimate how much you need after you retire.

Some people might spend more on food and another might spend more on travel. Be honest with yourself about what you need and what you don’t.

Years of retirement

Another good question to ask is, “How long shall my retirement fund last?”. If you are retiring in your 40’s, most probably you need more compared to someone who plans to retire at 65.

Human’s life expectancy is increasing thanks to improvements in medicine and also other areas. And, retirement fund needs more as we expect to live longer.


Commitments are something that to take into account seriously as they would affect your retirement amount and cash flow. In case, your commitments expect to continue after your retirement, make sure your retirement amount covers your commitments as well. No matter it is for a housing loan, car loan, personal loan or to support your loved one.

If you don’t like the idea of paying the commitments every month after you retire, another way is to plan and clear off the loans or debts before your retirement.

Health Conditions

Health conditions are something to have in mind when setting your retirement amount. Whether it is existing health conditions or inherited health conditions, be sure to include them in your forecast as well.

Especially if the medical costs for the health conditions is long term or money consuming.


Another factor to take into account is insurance. It is recommended to review your insurance plan from time to time so you could adjust it accordingly. If the insurance of yours unable to cover as much as you need, the retirement figures might be affected as well.

Rate of Returns

It is difficult to save for retirement purely by income in saving accounts, especially for normal people. It is more common to see people save in retirement schemes or in retirement portfolios.

The rate of returns hugely influences the speed of achieving your retirement amount. The higher the rate, the faster the increase of your portfolio value, but also there might be a higher risk.

Inflation rate

Another concern would be the inflation rate. The increase in the inflation rate erodes the purchasing power of your money. This means you need more money in the future to maintain your current lifestyle. Everything costs more when inflation happens.

How to Get the Retirement Amount?

The 4% Rule (x25)

A simple understanding of the 4% rules is you can withdraw 4% from your retirement fund or portfolio each year to cover the expenses for the whole year. And, in order to get the retirement figures with this 4% rule is to multiply your yearly expenses by 25.

For instance, if your monthly spending is RM5,000, then expenses for the year is RM60,000, so the rough figure to save for retirement is RM1.5 million.

However, the 4% rule has its limitations as well. According to Forbes, the 4% rule can be valid for the planning of retirement but it is not a guarantee.

Retirement Calculator

Other than the 4% rule, there are quite a few options of retirement calculators available online.

For simple or quick calculations, you may use the calculator by Multiply or a more detailed one from MyPF.

How much is enough for retirement in Malaysia are totally depends on your personal lifestyle and conditions. So, make sure you be honest with yourself while planning your retirement.

No matter how much is the retirement amount you get from the computations, remember there are always uncertainties in life. Ensure you review your retirement plan from time to time.


All above are just personal sharing. For financial advice, please refer to a professional licensed financial planner.


About the 4% rule:
1) Is The Four Percent Rule Still Valid For Retirement Today?

More Retirement Calculators:
1) 5 Excellent Retirement Calculators (And All Are Free)
2) Retirement Savings Calculator
3) Retirement Calculator

About Inflations Rate:
1) State Socioeconomic Report 2020
2) Inflation, GDP deflator (annual %) – Malaysia

About Life Expectancy:

Featured image by Ishan @seefromthesky on Unsplash

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