Monthly Archives: September 2014

8 things you need to think about before you retire… besides money

Ah, retirement. The day we no longer need to wake up to the 9-to-6 routine five days a week; the day we sit back and relax and do the things that we really like to do.

This is a perception that many hold until they reach retirement age, when it slowly dawns that the reality is rather different.

With at least 12 hours of free time a day, many retirees struggle with filling the gap with meaningful activities and relationships they likely missed when they are climbing the corporate ladder or trying to make ends meet.

Most would have accumulated a tidy sum for retirement, but do not know how to draw from it to sustain themselves for an indefinite number of years.

Some eventually realise that they do not look forward to a leisurely life and choose to continue working at a slower pace.

While adequate savings for retirement is the prerequisite for a sustainable retirement, it is often the non-financial aspects of retirement that will determine the quality of life after retirement.

In the late American pastor Harry Emerson Fosdick’s words, “Don’t simply retire from something; have something to retire to”.

So, regardless of the age you wish to retire, it is worth giving the following some thought.

#1: Protection

The presence of adequate savings to draw from after retirement gives us peace of mind, but these savings can be easily depleted due to inflation, longer lifespans, and unexpected events. Therefore it is important to have a backup plan for life’s challenges including death, accidents, illness and medical bills.

One of the most common forms of protection is insurance. According to Allianz Malaysia chief executive officer Jens Reisch, a general rule of thumb is to have life insurance coverage of approximately six to 10 times your annual earnings.

However, protection also comes in the form of your emergency contact list, having trusted friends and family who check in on you regularly, and friendly neighbours you can count on when you need them.

#2: Shelter

Do you want to continue staying in your three-storey bungalow or move to a more manageable apartment unit? Will you be staying alone, with your spouse, or sharing a space with other family members?

These are issues that require mental, emotional and financial adjustments, which could be made with support from peers and communication with the people involved in the transition.

In Malaysia, there will soon be options for those who are interested to live in retirement villages – townships designed to cater for retirees and their needs.

#3: Health

Health Deputy Director-General Datuk Dr Jeyaindran Tan Sri Sinnadurai “People should actually invest in health management,” says Health Deputy Director-General Datuk Dr Jeyaindran Tan Sri Sinnadurai when met at a recent conference launch.

While we are used to putting money aside for material possessions such as houses, cars, and that new curved TV, we should invest time and effort in our health before and after retirement.

This could be done by setting aside time every day to exercise and making effort to control our body weight, says Dr Jeyaindran.

#4: Friends and family

As an ancient Chinese saying goes, a faraway relative could not compare to a nearby neighbour.

This saying reminds us that although it is good to be able to count on family for support, we should also cultivate friendships within our community and maintain good relationships with our contacts before retirement.

While community work is not everyone’s cup of tea, it’s worth thinking about some of the activities you would enjoy and the likely people you could enjoy it with.

#5: Lifestyle

There is a budget for every lifestyle. It is more important to think about the type of lifestyle you want instead of the millions of dollars you were told you need after retirement.

If you have not saved enough, it is time to consider downsizing your life to match the amount that you have saved. If you have saved more than enough, it is also important to ensure that it can last as long as you need it to.

#6 Meaning and Fulfillment

In an article by Australian financial services firm Wealth Leadership Services Pty Limited on TheBull.com.au, retirement coach Peter Black suggests that retirees should consider how they are going to replace the following aspects work provides them: financial rewards, time management, purpose, status, and socialisation.

Without solid replacements, retirees often return to work a few months after retirement due to “boredom” or a loss of identity or purpose.

To transition smoothly, you can consider opting for semi-retirement instead of retiring fully within a short period of time to avoid the sudden lifestyle shock. Those who do not have this option can adjust emotionally by reviewing career expectations and goals.

#7: Stuff, aka belongings

Throughout our working lives, we accumulate documents, books, clothes, accessories and stuff we may not need during our retirement.

Donating or giving away some of these things may be good for your available floor space and your soul too.

#8: Goodbyes

At retirement age, not many are willing to think or talk about the last leg of life. However, death planning is as important as life planning as both are only different sides of the same coin.

Some of the basic preparations for end of life planning include a written will as well as discussions with close ones about personal preferences on end of life care, funeral services and issues like organ donation and the treatment of personal belongings.

This would not only help your loved ones in carrying out your wishes in illness and death; you will also be assured that your final days will be remembered in a meaningful and dignified way. – By WEN LIM

Source: Business Circle

Essential Economics shows how to develop successful retirement communities

A MELBOURNE-based consultancy firm has outlined 10 ideas for Malaysia to get retirement and aged-care services off the ground.

Essential Economics Pty Ltd is part of the Essential Economics International group based in Melbourne, Australia.

It is a consultancy firm specialising in urban economics, infrastructure and urban development in Australia and the Asia-Pacific region.

Retirement living and aged care, a rapidly developing sector, is one of its expertise. Its work includes undertaking market assessments, identifying geographic hot spots for such developments, providing advice on price points, and assessing project design and the range of associated amenities, its website says.

During a recent visit to Malaysia, Essential Economics’ managing partner Sean Stephens outlined several areas that Malaysia must consider if it were to provide any form of retirement and aged-care services.

Says Stephens: “Get the pricing and ownership model right. There is a need to understand the market with high-quality market research, demographic analysis and focus groups.”

He suggests learning from countries that have taken this path to build the industry. “Learn from countries that have already been doing this for 20-plus years and be prepared to tailor-make a ‘Malaysia’ solution,” he said in his presentation entitled “Sustainable Australian Retirement Villages”.

He was speaking at the “Invest and Succeed in Mixed Use Development” seminar organised by Malaysia Property Inc on Aug 28.

Because building retirement villages is something that is new in Malaysia, educating the market is crucial.

To get the template right, Stephens says it is absolutely necessary to implement industry standards, protocols and collaboration to minimise the danger of rogue operators who damage industry reputation. Building an eco-system for this industry to succeed requires Government leadership and support. The principle of this industry seeks to maximise the independence of an ageing population.

“The focus is not healthcare or aged care, but to be able to live independently with the highest quality of life within the framework of the retirement village.

“The cost of an ageing population to society is reduced if seniors are able to remain independent for as long as possible,” he says.

Stephens highlights that 5% of the population aged 65 and above are in retirement villages in Australia, compared with 10% in the United States.

Because the industry is new in the country, he says there might be a need to form joint ventures with existing international operators.

Anyone or any entity that embarks on this industry must recognise that retirement villages are a long-term asset to a country and to the society it is located in.

To ensure its sustainability, retirement villages require ongoing care and management.

Issues like site selection is important, he said, during a rundown of 10 ideas for the industry to kick off in Malaysia.

“There must be a national regulatory framework, rather than a state-by-state one,” he says.

Stephens says there are many reasons which contribute to integrated retirement living in Australia.

“Residents must feel safe and secure at all times for their own peace of mind and that of their families. Access to off-site services like shops, healthcare, safe and easily available public transport is a must.

“The availability of on-site recreation facilities is critical, although this is complementary to off-site facilities,” he says.

“Structure your pricing model to attract the demographic that is the best fit for the particular retirement village,” adds Stephens.

On the Australian experience, Stephens says the dominant focus of the Australian retirement village industry is to provide long-term residential accommodation for older people to enable them to live ‘independently’ for as long as possible.

“The focus is not so much on healthcare or aged care nursing.

“However, having said that, basic health and support services are provided, but this is only in order to support the independent living arrangements of residents.”

The industry, he says, is characterised by a mix of for-profit and not-for-profit operators.

Despite the presence of some operators with large portfolios of villages, the industry in Australia remains highly competitive in a highly regulated environment. They are also required to comply with the Australian Government-determined funding arrangements, legislation and regulation, he says. – By THEAN LEE CHENG

Source: The Star

The post-retirement life

MANY of us live for the moment, and to a certain degree, this may be the best way to live.

But there is another group, who, while living for the moment, also have some thoughts about their twilight years.

In a seminar organised by Malaysia Property Inc on Aug 28 in Kuala Lumpur entitled “Invest and Succeed in Mixed-Use Development”, several papers on retirement living were presented.

The general thought among speakers who advocated more emphasis on post-retirement life was that although developers had the capability to build facilities for the elderly, they would not do so because “they (the developers) are not going to look after the community for the next 20 years”.

The conclusion was that developers prefer to sell, build, make a profit and move on to the next project – a sprint – instead of entering into a project for the long haul – a marathon.

Instead, it is the boutique developers who might consider offering facilities for the aged and elderly, says Performance Management and Delivery Unit (Pemandu) director for healthcare and low-income households Dr Chua Hong Teck.

Dr Chua was presenting his paper entitled “Investing in Seniors Living”.

Citing examples like Eden-on-the-Park in Kuching, Sarawak, and GreenAcres in Ipoh, Dr Chua says there is an unmet need for quality services as one grows older.

“When I was working in the Kuala Lumpur Hospital (KL General Hospital), it had the most number of seniors left behind by their family members.”

Coupled with this is the higher prevalence of diabetes, obesity and disability in the country compared with Australia. “This brings vast business (investment) opportunities for the aged care industry,” Chua says.

He divides these twilight years into three stages: independent living in a retirement village, assisted living and dependent living in nursing care centres.

A retirement village enables seniors to live independently. People age differently and there may come a time when a spouse may need assisted living or dependent living.

Assisted living provides care and assistance, while dependent living involves institutional care, as in a nursing home.

Chua says a social environment or community which allows seniors to move from one stage to another seamlessly is a better model than building houses and providing healthcare facilities.

The principle, says Chua, enables those who are able to live independently to do so, while care is available close by. A playground may be found in a retirement village to cater to visiting grandchildren.

As needful as an integrated retirement might be, investing in seniors living goes beyond bricks and mortar.

It involves a whole new eco system. Insurance coverage must cover home treatment as opposed to just hospital visits. Finance and tax incentives during one’s twilight years are other pieces of the puzzle.

Says PricewaterhouseCoopers senior executive director Khoo Chuan Keat: “Baby boomers (those born between 1946 and 1964) want to provide care for their elders, but cannot expect the same generosity from their children.

“Many baby boomers are looking at how they can unlock the value of their big houses. If they don’t sell it and keep some money for themselves, their children will sell it. So, let’s not be sentimental,” says Khoo.

In his paper, “Opportunities & Challenges for Malaysian Retirement Villages”, Khoo says upon retirement, business and social contacts would slowly diminish.

There is a need to establish a new like-minded community to look out for each other. Living in a condominium, one does not know one’s neighbours. It is this, says Khoo, which is driving the interest in retirement villages today.

The concept of multi-generational families is losing traction, as young people establish families away on their own or live overseas. This trend means there is a greater need for seniors to be self-sufficient.

By 2020, Malaysia will be an ageing nation, as defined by 10% of its population aged 60 and above.

It is this “shift in age structure” that impacts the economic, social and political environment. And therein lies the investment opportunities.

Source: The Star

Being prepared for old age crucial for Malaysians

LIKE death and taxes, getting old, ill and dependant are inevitable.

It’s an easily dismissed subject when you are a strapping lad but with the passing years, the realities of illness and aging cripple some of us who are not prepared.

In trying to understand how we as a nation can better deal with managing care for the aging, we should appreciate how developed nations cope.

Japan’s population will fall by a-third in 2060, with nearly 40% being above 65 years of age.

Lifespan tends to be longer for developed societies with access to medical technology and high standards of medical care – in Japan’s case, its life expectancy is about 83 years.

As we approach high income, developed nation status, we are heading in a similar direction.

The average life expectancy for a Malaysian in 1957 was just 56 years.

Now it is at 75 years. By 2020, the number of Malaysians aged 60 and above is expected to hit 4.46 million up from the current 2.32 million.

For this article, let us look at life in three phases – phases that we are all likely to go through, in some form or another.

For the young and mobile, this is the on-the-go phase. We will eventually slow down – perhaps as we reach our late 50s – I call this slow-go.

Some will reach the point where they become fully dependent on others for care – the no-go stage.

People who are debilitated or those caring for them, suffer the most.

My father was diagnosed with Alzheimer’s a few years ago. At that time, my siblings and I faced the harrowing, heart-wrenching process of accepting that there will come a day when he will no longer be the strong, capable leader and father he once was.

We also had to seriously consider how best to take care of him.

From my observation, care and support in our country for the slow-go stage is acceptable. There are public and private hospitals that cater to a range of medical needs with the assumption we can still care for ourselves.

But when bedridden or fully-dependent, this is where the real struggle begins.

Reflecting on our experience in caring for my father, there are three aspects to getting aged care on the right track:

1. Ensuring proper standards

The elderly require various levels of care, and services must be catered to fit these purposes. For those who need minimal support “low care” will be the right choice and cost for such level of attention will be minimal.

The ones who are in the dependent stage will require “high and intensive care”, and we will see costs escalate.

The new Aged Healthcare Act, to be completed at the end of this year, addresses these needs.

The Act regulates the provision of services and facilities for aged care – aimed at transforming aged care facilities and services and upgrading skill requirements for caregivers.

The Government also encourages the development of senior communities such as retirement villages, and is pushing for a robust mobile healthcare industry that caters for those who wants to age at the comfort of their homes that can be covered by insurance.

2. Prepare for the future

I cannot stress enough of the importance of savings and insurance. While still working, people should deliberately save enough money and get sufficient insurance for old age. Insurance premiums tend to be low for the young. Locking the rate in early means you are able to secure medical care at a much lower cost.

Just one large calamity can leave you in dire straits if all you have is your EPF or Socso. Being prepared for the eventuality of old age is crucial.

In Malaysia, public health is highly-subsidised. That is why it is one of the most affordable countries in the world. For example, a GP treatment at a government hospital in Malaysia is charged at an incredibly low RM1, a rate established way back in 1982! Going forward, the level of subsidy in the current public health system is unsustainable.

3. Strong cooperation from all parties

We need the strong backing of all groups that contribute to a dynamic healthcare system for the aged. Social welfare agencies, healthcare providers and the medical profession must find avenues to collaborate. Presently they work in separate areas but if the industry can set up one-stop centres for aged care, this will be a practical collaboration.

Geriatric-friendly housing is the next natural step. In Singapore, such buildings have features like bathrooms with grad bars and emergency buttons in each room, with a doctor on standby in each building.

My father is a brave man. Upon diagnosis, he organised a party and invited all his friends and family members. As the celebration was underway, he stood up to speak.

“With my disease, I will die twice – once mentally and the other, physically. Say to me tonight everything you want to say because the next time I meet you, I may not know who you are,” he said.

We all sang Amazing Grace that night with so much choked emotion. Tears flowed freely. For us as his children, it was a brutal realisation of the daunting days ahead. My parents then made the decision to leave their beloved Bario to move to Kuching to live with my big-hearted sister in order to access medical facilities.

Whenever I get the chance, I return to Kuching. The roles have reversed. Sometimes, I would lie on his bed and hold him as how he held me when I was a child. I remind him stories of our past to trigger his memory, and we spend many an afternoon laughing and praying together.

As much as I talked about the practicalities of managing the elders, caring isn’t just about money. The old and incapacitated are most vulnerable. What they need is our time, attention and unbridled love. My brother, who lives in Australia generously took up almost a year to stay with my father in Kuching. Indeed, we should all give grace to the people we love so they can age and eventually, depart with dignity. – Opinion by DATUK SERI IDRIS JALA

Datuk Seri Idris Jala is CEO of Pemandu and Minister in the Prime Minister’s Department.

Source: The Star

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