Annuity

At what age do you plan to retire? What do you plan to do when you are retired? Do you know how much money will you have? How much money will you need?

Based on the EPF data in Malaysia, on average a man can live 75 years and 78 years for a woman. So, if you retire at 55 years old, you will have approximately 20 years to spend whatever you saved. Do you already have a plan to get enough fund to support that 20 years period (or even longer)?

Usually people save their retirement fund from these sources:

• Bank - savings/current/fixed-deposit
• Unit trust
• Stock/share market
• Property
• Insurance
• EPF/CPF
• Children

They all have pros and cons, which I'm not going to touch now. But please consider one more option, Annuity. Annuity is actually a combination of Bank and Insurance from the list above. It provides fixed income after retirement, usually pays you once a year to support basic living needs.

There are a lot of combinations and options that you can have in an annuity plan. It is very common in the USA, but less acceptable in Malaysia yet, as people often don't like to talk about old and and death (same like insurance).

I urge you to consider this option seriously, and do your estate planning as early as possible. I won't go into detail of what is an annuity, coz you can read more from here.