When we are living much longer… better prepare MORE.

Do you know that in less than 20 years, Malaysia will be an ageing nation? The year that it is projected to happen is as early as 2035. Referring to the chart from newsletter from Department of Statistics, Malaysia. will reveal that the chart looks pretty scary. From a wide bottom half, we can see the top half increasing while the bottom half continues to shrink. What happens when we really have so many elderly retirees amongst us?  We used to have people retiring at 55. These days, working till 60 is pretty common. Okay, working till 93 is really uncommon. What happens if we retire at 55 and we live another 15 years? It meant that we needed to ensure our money could last us for the next 180 months. Now comes the real issue. In future, Malaysians will live much longer. Perhaps the average life expectancy may become 85? This is not even a theory because in countries such as Hong Kong, Japan, Spain, South Korea, France and Switzerland, the women is already living beyond 85 years of age. Image below. Source article here. 

Humorously, we can do two things. First thing is, everyone should start working earlier. If they would be living for a longer time, the only way to earn more income is by working longer. Maybe I should start getting my daughter to work and earn a fixed salary in a few years’ time. Haha. She’s 5 years old currently.  Second thing is, she will have to pray that her father would not spend all his earnings and leave her and her brother more money so that she will have an easier time in the future. Seriously though, perhaps everyone must really sit back, think hard and spend smart. Investment is vital but by not spending so much, one would have more ‘bullets’ when it comes to investment. A government, even a good one will struggle because the number of people paying taxes would actually be dropping but the expenditure to care for the elderly will increase. This is why the tax net MUST be cast wider and not pressuring a smaller number of tax paying citizens more money instead. Anyway, since it’s another 17 years more to go, there’s still time to build MORE wealth by way of investment. Happy understanding the implications.
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written on 2 Aug 2018
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