Specific Retirement Investment Plan

In our point of view, there is no specific retirement investment plan that can best suit everyone in the world. Different individual may have different preferences and lifestyle, and they may need different retirement plans. It also depends heavily on an individual’s risk tolerance and expected return. Therefore, Private Retirement Scheme (PRS) or unit trust is not the most appropriate retirement investment plan for everyone. For instances, individuals who are high risk tolerance may invest in property or real estate which give them a better return compare to mutual fund.

However, for those who have limited capitals or funds, they may prefer invest in retirement mutual fund. There are many choices that are available in the market, so let have a look on it. After donkey’s years of slogging and hard works, everyone probably look forward to have an independent and financially accomplished post retirement life.

However, there are many of them think that this is a greedy desire and never expecting to have an early retirement due to their financial burden.

But actually many of us can have an independent and financially accomplished post retirement life, if they park their income at the right point in the right method. If an individual is seeking for a zero risk method to earn some interest on their fund, investing in high interest saving account would be the best options. By keeping their money on deposit, they may earn a nominal amount of interest in return. This method requires almost no effort and stress less compare to investing in private retirement scheme (PRS), what investors need to do is just register an account and depositing their funds only.

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The best high interest saving accounts provides competitive interest rates without charging any services fees. Besides, individuals are advised to invest in banks with good reputation and strong financial background to get easy access and online account management, good customer services quality, and guarantee returns.

Currently, Affin Bank is offering high and attractive interest rate (0.75% to 3.15% p.a.) with lowest minimum initial deposits (which is only RM1) under their Affin Gold plan (RinggitPlus, n.d.). This plan is designed to celebrate one’s golden years with higher deposit interest rates. The following retirement investment plan is mutual funds. Retirement mutual funds unlike other fixed deposit or any retirement plan, it does not request filling premiums on time and there will be no restrictions on money withdrawals from their account. In other words, it means that an individual can withdraw their money partially or completely at any time any place without any exit load restrictions and controls. Conversely, if an individual want to withdraw their money from private retirement scheme before the contractually agreed time, they will being penalized. Therefore, retirement mutual fund has become phenomenally popular lately.

Next retirement investment plan is Annuity. Although annuity are expensive and often come with enormous commissions and fees, but buying annuity is not necessarily a bad option. If an individual has extremely low risk tolerance, fixed annuities can be a smart option because it offers virtually guaranteed income for investors, and for a price, an individual can even get protection from inflation (Matthew, 2018). Therefore if investing in private retirement scheme or unit trust sound too risky to you, then investing in fixed annuity might be a good options. Running out of money in golden years can bring out many issues, especially in the later life when it may not be workable to get a temporary or part-time job. Therefore, investing in immediate annuity, also known as deferred annuity can protect an individual against running out of income as they get older.

In the beginning phrase, investors are required to deposit or save their money into the account. Once the annuity reaches the contractually agreed date, the investors will receive a series of payment in the future. By having this series of payment, an individual may not worry about outliving their savings. Annuity is more attractive compare to private retirement plan is due to its investment flexibility. Investors of annuity can go for specific retirement investment plans in a variable annuity at acquire and prior distribution. This flexibility also applicable to how to receive the series of payment, it can be for a specific period or up to a lifetime and can add in survivor advantages. In short, which retirement investment plan is the better option for an individual is rely heavily on what kind of investment features they are looking for.

Is the individual high risk tolerance? Does guaranteed return is something that they looking for? However, an individual should not limit themselves to one plan; they can enrol themselves into both private retirement scheme and other retirement investment plan such as mutual funds or annuities. Nobody is too young or too old to kick-start their saving for retirement. Whether an individual will enjoying or suffering their retirement life, it depends on what action they make now. Last but not less, public must remember that no matter how good their retirement plan is, if no action taken now, it is nothing. Therefore, we would like to end this assignment with “your future is created on what you do today not tomorrow”.