Retirement & Will

Dear Andrew Hingston,

For me, Part 4 was very informative, but I found the topics on retirement and estate planning not very relevant to me at first. I've barely started working, so I'm not exactly considering retirement (though I'd like to if I won the lottery or something) and I really don't have much to my name which is worthy of noting in a will.

Nevertheless, retirement is a valid issue for my parents, well my dad anyway since my mother doesn't work. He's even considering retiring early... i.e. before age 55. In Malaysia where they reside, the situation is slightly different from Australia. For example, it's quite rare for the older generation to continue working part time after they are officially retired. Also, since my father works in a non-government company, he will not be eligible to receive any pension benefits after retirement, but he will be able to withdraw the equivalent of superannuation called EPF - Employees Provident Fund.

Another thing is in Malaysian Chinese culture, family ties are very important. It is considered normal and respectful for adult children to care for their parents when they are old by taking them into their own home. Or at the very least, hire help for them so that they can live in their own home. Sending your parents to an old folks home would be turning your backs on the people who clothed and fed you and cared for you, and isolating them from the rest of the family. For my family at least, noone would be ecstatic about being sent there. That's why my grandmother who is 74, lives with us (and is still healthy and strong I might add - she takes care of us, not the other way round!). Thus, retirement homes are not popular, and I highly doubt my parents are considering any of the sort.

My parents are doing what they can now to assure themselves of a comfortable retirement. Besides seeking to pay off the house, my father (as mentioned previously) is investing in various things, like property and shares. Because the money in his EPF exceeded a certain amount, he was able to withdraw the extra without being taxed and invest it. He has purchased several properties (some of them jointly under my name, since I am the first child and I will be the next person in the family to enter the workforce. It is sometimes difficult to obtain bank loans for property when you are almost hitting the retirement age).

I guess my dad believes he is doing enough to set himself and my mum up for a happy retirement. Unless of course he decides to migrate to Australia like he always claims he wants to do. I think the money he has earned won't go very far then if the exchange rate (rm3 = AUD 1) is taken into account.

On the topic of a will, I am quite unconvinced that I need one, though you sir, seem to think we all do. First of all, I have barely $5000 worth of assets, and I am unmarried. Wouldn't everything I own automatically go to my parents and my siblings? Noone would bother to dispute over the amount that I have.

I would definitely make sure I have a will once I start working permanently. Also, the story of John and Judy is a scary (and such a depressing) scenario; I'd definitely talk this issue over with my future spouse and get the issue of a joint will settled after our marriage. I plan to be an optimist though, and NOT put a dampener on my honeymoon by meeting up with a lawyer right after the wedding vows. Sorry, I'm a romantic. And I choose to look on the bright side instead of anticipating we'll die within the week of after getting married.

I think I will go check out that "will kit" this weekend - just to be safe.

Next post will be soon! Since I have a week left to post. *wink*