Thesun 2008-11-07 Page28 Inflation Dents Retirement Plans

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theSun

| FRIDAY NOVEMBER 7 2008

media & marketing

Inflation dents retirement plans NEW insights indicate that inflation is having a significant effect on the retirement plans of Malaysians, especially those about to retire, based on the recent

72%

Prudential Retire-Meter 2008, an independent survey commissioned by Prudential Assurance Malaysia Berhad. The study showed that 36% of

say they are saving for retirement I do not save

Currently I save but not for retirement

14%

13%

28% I save up occasionally with the goal of meeting my retirement needs

I save up regularly with the goal of meeting my retirement needs

44%

High propensity towards saving, but...

people approaching retirement (i.e. aged 45 to 55 years) said they were less confident about retiring compared to a year ago. Eighty-one per cent of the group also felt that inflation had risen significantly and has had a substantial effect on their lifestyles. More than 50% also stated that they would work a few years beyond their mandatory retirement age, citing an income boost as the main reason for doing so. Prudential chief executive officer Bill Lisle said the survey showed that Malaysians in general are affected by the recent inflationary conditions, with 48% expressing concern that they would not have enough money to take care of their retirement needs. “With increasing inflation and the impact of the current United States economy, there are growing concerns about the rippling effects that these could have on Malaysians. However, it is worrying to see that Malaysians still do not have proper planning when it comes to retirement,” he said. “Our survey found that although Malaysians have a high propensity to save (72% claim they do save for retirement), their current savings behaviour indicates a lack of proper planning.” Among people who save for retirement, 77% invest in lowyielding savings vehicles such as bank fixed deposits and savings accounts to accumulate their nest egg, while 41% claim to “just save

as much as they can now and hope that they will have enough for their retirement”. “To make matters worse, most Malaysians do not segregate their savings account for retirement. This means their monies are lumped together as general savings,” Lisle said. Among people who consciously separate their savings for retirement, 83% said they would use the money if they had to. A staggering 73% do not seek the advice of financial professionals, which could compound Malaysians’ poor preparation for retirement, Lisle said. Releasing the findings of the survey at a media briefing at the Mandarin Oriental Hotel in Kuala Lumpur recently, he said the second annual survey was conducted in August, as part of the company’s on-going efforts to keep a pulse on Malaysian attitudes and behaviour towards retirement. “The findings of Prudential Retire-Meter 2008

have been extremely insightful to us at the company. It is our hope that sharing these findings with the Malaysian public will help jolt them into being more pro-active when it comes to accumulating and managing their retirement funds, and ensuring that their retirement plans are inflation- and recession-proof,” Lisle added. Prudential commissioned Research International, a global research agency, to conduct the survey which covered key urban centres in Peninsular and East Malaysia. The agency interviewed a total of 1,024 Malaysians of all races with a monthly household income of RM3,000 and higher.