Especially for Business Owners with Family Commitments
Thinking about retirement can feel overwhelming especially if you’re running a business and juggling family responsibilities. Whether you plan to retire early or work as long as you can, having a simple checklist helps you stay on track and avoid costly mistakes.
Here’s a practical guide to help you prepare for a smooth and comfortable retirement in Malaysia:
# 1 Decide When You Want to Retire
Are you thinking of retiring at 55? Or perhaps at 60, like the mandatory retirement age for employees? Some business owners aim for early retirement at 45 so they can focus on other passions. Others plan to keep going beyond 60 as long as health permits.
Set a clear retirement age. This helps you plan better especially when calculating how much you need to save and invest to retire comfortably.
#2 Clear Off Debts
Try to settle as many loans as possible before you retire. This includes personal loans, credit cards, car loans, and especially your home loan.
Why? Because once you stop earning a full-time income, paying off debts becomes harder. For example, many Malaysians still have housing loans during retirement. That’s a big burden if your investments can’t earn more than the interest rate you’re paying.
Tip: Settle high-interest debts like credit cards first, they charge around 18% interest annually!
# 3 Understand Your Retirement Expenses
Estimate how much you’ll spend each month after retirement. Your lifestyle might change, but you’ll still need to budget for basics like food, utilities, and medical expenses.
Some costs will go down (like work-related travel), but others like health supplements or insurance, they may go up. Don’t forget to include big items like family trips, a child’s wedding, or home repairs.
Start tracking your spending now, so you’re not caught off guard later.
#4 Plan What to Do After Retiring
After the first few months of enjoying your free time, how will you spend your days?
Retirement should still feel meaningful and active.
Some options:
- Start part-time consulting or freelance work.
- Join NGOs or charity groups.
- Get involved with your religious community.
- Learn a new hobby like gardening, painting, fishing, etc.
Staying active keeps your mind sharp and your heart happy. It also helps fight loneliness, which is common among retirees.
#5 Think About Downsizing
Once your kids are independent, consider whether your current home still fits your needs. A smaller home or moving to a quieter town can save you money and reduce stress.
Choose a place with easy access to clinics, supermarkets, and social activities. Not sure if it’s right for you? Try renting in the area first before making a big move.
#6 Review Your Insurance
Before retiring, check your insurance coverage. Do you have enough protection for hospital bills, surgeries, and long-term care?
Buy additional coverage now while you’re still healthy. Once health problems start, getting insured becomes harder and more expensive.
Also consider getting insurance that covers critical illness or long-term care. It’s better to be safe than sorry.
#7 Budget for Health Costs
As we age, medical expenses will increase. Even with insurance, you may still need to pay for things like:
- Supplements
- Private consultations
- Regular check-ups
- Treatments like physiotherapy or even dialysis
Ask older friends or relatives about their health expenses so you can plan realistically.
#8 Settle Important Documents
Make sure your will is done. If you own a business, plan your exit properly, this includes shareholder agreements and business continuity plans. You may also want to prepare a Power of Attorney or a trust to protect your family and assets.
Speak with a licensed financial planner or estate planner to get this done properly.
#9 Know Your Retirement Number
How much money will you need to retire comfortably? This includes monthly expenses, inflation, and how long you expect to live in retirement.
For example, if you plan to retire at 55 and live till 80, that’s 25 years of living expenses. Multiply your yearly budget by 25 and add a buffer for rising costs.
Check if your EPF savings, business profits, rental income, or investments are enough to support this. If not, now is the time to bridge the gap.
Take note:
Retirement planning can feel like a lot but you don’t have to do it alone.
A licensed financial planner can help you review your finances, identify shortfalls, and suggest smart strategies tailored to your situation as a business owner and family provider.
Start now! Your future self will thank you.