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Simple, routine vehicle maintenance and smart driving habits can help you save hundreds of ringgit in fuel costs a year.

SO fuel prices have gone up. Granted, it’s not that much and there is no reason to hit the panic button, but you’re definitely going to feel the pinch, even if it’s a small one.

To recap, last week the Government announced the increase in the price of RON95 petrol by five sen per litre to RM1.85, while RON97 will no longer be subsidised.

The price of diesel rose by five sen to RM1.75 per litre.

What this means is that if you are used to topping up your tank with a certain amount of money before, you’d realise now that the fuel gauge won’t be as high as where it used to be and driving to the pump is going to become a wee bit more frequent.

However, there are steps that you as a driver can take to help mitigate this. Simple, routine vehicle maintenance and smart driving habits can help you save hundreds of ringgit in fuel costs a year.

Don’t drive aggressively

According to a study by Natural Resources Canada, frequent “jackrabbit” starts (that is, fast acceleration of a motor vehicle from a stationary position) and hard braking can increase fuel consumption by almost 40% and only reduces travel time by a mere 4%.

“The ideal way is to accelerate slowly and smoothly and then get into high gear as quickly as possible,” says Simon Lam of Used Autos Sdn Bhd, a Kuala Lumpur-based used-car dealer.

According to Lam, in normal city driving, about 50% of the energy needed to power a car, is used during vehicle acceleration. “If you notice you’re slamming on the brakes hard and often, then it’s a sign that you’re wasting fuel unnecessarily,” says Lam.

According to eartheasy.com, increasing your highway cruising speed from 90 kmh to 120 kmh can increase fuel consumption by as much as 20%. One can improve gas mileage by 10% to 15% by driving at around 90 kmh.

Alternatively, you can opt for cruise control if your car has it, says Lam. “This is especially good for long trips. Not only will it reduce your urge to speed, you’ll also feel less tired after the journey.”

Keep tyres properly inflated

Under-inflated tyres create added rolling resistance and can increase fuel consumption by as much as 6%, says Klang Valley-based tyre agent Vincent Pang.

“Check your tyre pressure regularly and make sure to inflate them as recommended by the manufacturer. It’s not difficult to do and doesn’t cost you anything. Looking after your tyres not only helps you to reduce fuel consumption, it promotes better vehicle handling and tyre life,” he adds.

But, apart from taking care of your tyres, keeping your entire car in good working condition also ensures that it is running at optimum levels and peak efficiency.

Use air-cond sparingly

Okay, we all know how unkind the Malaysian heat can be, but a two-minute trip to the mamak stall or post office without air-conditioning won’t kill you.

According to eartheasy.com, using a vehicle’s air-conditioner on a hot day can increase fuel consumption by as much as 10% in city driving.

At low speeds, opening the window helps to save fuel consumption by reducing air-condition usage.

However, at high speeds, driving with the air-cond on is more fuel-efficient than the wind resistance caused by having the windows and sunroof open, it says.

Travel light

The more weight you carry, the more fuel you use, says Kuala Lumpur-based mechanical engineer Peter Lau. “Your car is a means for transportation, not a mobile storage facility. Keep heavy items like tools, sports equipment or other items at home when you don’t need them,” he advises.

Lau adds that vehicle add-ons, such as roof racks or even spoilers, can add to wind-drag and reduce fuel efficiency.

“Remove items such as roof and bike racks when not in use. If you have to use them, load them in such a way that any sort of drag or resistance can be minimised while driving.”

Source: The Star Online

EVER so often, we come across appeals for donations to pay medical bills. In a typical case, the illness requires immediate treatment and the patient has to go to a private hospital. The trouble is, not everybody can afford healthcare charges based on commercial rates.

Months ago, it was reported that a 10-year-old boy needed over RM100,000 for a bone marrow transplant. Two bone cancer patients sought donations to undergo surgery. A three-month-old baby diagnosed with multiple ventricular septal defects was in dire need of funds.

Another man had nose cancer and needed financial help, and two days ago, a nine-year-old boy asked for more funds for his bone marrow transplant although his parents had already spent RM300,000.

These are heart-wrenching stories – the young and old fighting for their lives and depending on charity for a lifeline. They are the most vulnerable group and even insurance companies are reluctant to give them coverage.

The government hospitals do not turn away patients no matter how poor they are but having to wait for an appointment to see a specialist or to have surgery can be costly.

When the public sector cannot fully satisfy the demand for healthcare services, it is left to the businessmen to fill the gap.

“The Malaysian healthcare has emerged from a government-led and funded public service system to a dual-tiered parallel system with a sizeable share and thriving private sector,” says Malaysian Medical Association (MMA) president-elect Dr David K.L. Quek.

Overstretched

The waiting time is not the only issue with public healthcare. There is also the need to keep up with technological advancements. Is the Government spending enough to give citizens the latest and the best in treatment options?

About 7% of the national budget is allocated for healthcare. Budget 2010 proposed a reduction from RM13.7bil last year to RM13.1bil. In comparison, the US healthcare spending reached US$2.3 trillion, representing 16.2% of the American economy.

In Malaysia, says Quek, about US$400 per patient is spent on healthcare every year but some of our neighbours are spending in excess of US$1,000. Treatment for chronic diseases alone is said to make up 75% of most countries’ healthcare spending.

But it is unfair to say our public system is bad. The doctors and nurses are stretched and they are doing their best. In fact, some of the brightest talents are in the public sector and it is small wonder that the private sector is constantly luring them.

But the workload in the public sector is daunting. The sector has about 50% of the country’s doctors who attend to 80% of the population while the remaining 50% of the doctors in private practice treat 20% of the population. That explains the long queues at public hospitals. But how many of us can afford treatment at private hospitals?

There is, therefore, a disparity and reform is the way forward. “We welcome a change to the current healthcare system as there is a gap and hopefully, the new system will bridge it. Healthcare should be available to all,’’ says Tropicana Medical Centre consultant cardiologist Dr Haizal Haron Kamar.

Healthcare for all

There is a gap in the current system. Hopefully the new system will bridge it… DR HAIZAL HARON KAMAR

The principle is that there should be universal access to healthcare, whether young or old, rich or poor. The Government has been talking about a revamp for nearly two decades.

Recently, Health Minister Datuk Seri Liow Tiong Lai announced the intention to implement the National Health Financing Scheme (NHFS). That is supposed to provide healthcare for all.

The details are still sketchy but the idea is for all Malaysians to have access to primary healthcare at any public or private clinic. Liow was reported to have said that NHFS would also look at secondary healthcare coverage and the illnesses and treatments it might be able to cover.

Globally, the challenges in healthcare are the rising costs, quality issues and the waning consumer trust. The NHFS will need to address these as well.

There are many options but somewhere along the line, wage earners will have to pay via scheduled monthly contributions or other mechanisms. The self-employed, those who have an independent income as well as employers would also have to contribute and all these will be based on wage scales.

It is said that the rich will pay more. The concept is the rich funds the poor, the able helps the disabled, and the young helps the old.

The implementation

Although the details are still being hammered out, those in the private sector are anxious about their part in the NHFS. “We need a blueprint and we need to know the role of private hospitals and clinics,’’ says Haizal.

Liow could not be reached for comments but from previous news reports, it appears that the NHFS will be split into four phases and will take 10 years to implement.

The first stage is to look at the governance and standards of care issues; the second is to grant more autonomy to primary healthcare providers in areas like human resources and management; the third is to integrate all public and private clinics in a common network so that people can access either one; and the fourth is to introduce a national health insurance under the NHFS.

According to the Minister, the National Health Financing Authority, a statutory body under the Ministry, will manage the funds. New legislation may have to be passed and existing ones amended to pave the way for this scheme. Regardless of how much one contributes, everyone will enjoy the same standard of care.

Whatever the shape of the new scheme, it should not burden consumers. The patients’ waiting time should be reduced and the rakyat should get access to healthcare.

Separating the pharmacies from the system may be a good move, but there should be a proper control of medicines so that there is no profiteering.

Also being considered are training and the need to embrace developments in technology. Identifying general practitioners who will be the patients’ first touchpoints is critical as well. Linking the private and public sectors is another big hurdle.

To Liow, the scheme will control escalating costs better; let consumers choose between going public or private; offer better quality care; and be more effective, efficient, viable and sustainable.

The Ministry is still looking at the best mechanism for collection; rates and conditions of contribution; how to pay to the clinic or hospital; the illnesses to be covered; the ratio of co-payment; and the financial implications to the Government.

What doctors, insurers say

Quek, whose association represents some doctors but not all, hopes for dialogues and discussions with the Ministry so that the doctors can give feedback. Their concern is understandable, as there is a thriving private healthcare industry that needs to know where it will fit in the whole scheme of things.

He says: “We understand that the country needs some form of universal coverage for Malaysian residents but feedback from all is necessary. The consultants can give their views but the views of the various stakeholders – the private hospitals and clinics and the citizens – are critical in determining the robustness of the plan.

“We want a system that the public will benefit from at reasonable costs. And the public buy-in is needed because the cost of healthcare is expensive.’’

Haizal, who has worked as a doctor in Britain for six years and is therefore familiar with the National Health Scheme (NHS), says in Britain, the private hospitals are not part of the NHS.

Equally anxious are the insurers. Today, people with insurance policies can walk into any private hospital to get treatment. Will that be the case when the NHFS comes into play?

To them, the scheme is a “good start for better and more accessible healthcare services in the country’’ and if properly managed, it can be like similar schemes in Britain and Australia. But there are potential pitfalls, of course.

Life Insurance Association of Malaysia (LIAM) president Md Adnan Md Zain says abuse and fraud are the main challenges facing insurers in offering such coverage, adding that being prudent and offering selective types of coverage will help manage the loss ratio effectively.

According to the association, there is a tendency for doctors to charge higher when billing patients covered by health insurance.

What the consumers want

What the consumers want is not to have to worry about crippling healthcare bills. Yes, there is a price to healthcare but it should be manageable. One thing that everyone fears is illness or disease in old age. It is difficult to get insurance for the very old as coverage usually stops at 70. Many people have to dip into their Employees Provident Fund (EPF) accounts, which is supposed to be for their retirement years.

Observers says the usage of EPF funds for medical treatment is “unacceptable” as the EPF savings should not be depleted. It is meant for old age, not illnesses.

With the NHFS comes the potential of taxes going up so as to enable the Government to fund it. If healthcare is to improve, the money has to come from somewhere.

Federation of Malaysian Consumers Association (Fomca) secretary-general Muhammad Sha’ani Abdullah says the scheme is essential as the current insurance-based model does not provide affordable coverage for those in need of healthcare protection.

The Government needs to get more funding if it wants to implement NHFS but it should not overburden the consumers. And for those who want something better than a standard room, for example, they have to pay for the extras. This is to ensure that no one abuses the healthcare system.

It will be tough to streamline the healthcare system but being a late starter, we can learn from those who have done it. We know the British model is not perfect and that the Australians are looking to improve its current system. In the United States, the new healthcare bill has just been passed after much debate.

What we want is a holistic approach to healthcare. Therefore, engaging with the relevant stakeholders is crucial so as to cover all angles and make it a success.

Staying on course to make sure it become a reality this time around will be a huge challenge. But there is no denying that the citizens need the NHFS. The cost of healthcare will triple in two decades and the man in the street may not be able to afford to fall sick then.

Source: The Star Online

LAST week, a report from World Bank warned of the re-emergence of inflationary pressures in Asian economies that could complicate the region’s prevailing policy stances to support growth.

Consumer prices have been on the rise in the region’s economies since the beginning of the year, as economic activity starts picking up across the region. For instance, in the two largest Asian economies – China and India – inflation have already accelerated over the last two months.

In China, consumer price index in May rose 3.1% from a year earlier, compared with April’s 2.8% rate, while property prices rose 12.4% from a year earlier.

This has prompted World Bank to urge China to raise interest rates to curb the country’s rising inflationary pressure and soaring property prices.

In India, on the other hand, inflation hit a two-year high last month, with wholesale price index rising 10.16% from a year earlier, compared with the 9.59% rate in April, as higher food and fuel prices continued to drive overall costs up.

Local key government officers over the week said India’s inflation rate had reached “very uncomfortable” levels and that the central bank had to step in to curb the pressure.

Singapore’s consumer prices jumped 3.2% in April, and are expected to rise around 2.7% in May, while Indonesia’s inflation rate has already exceeded the 4% mark since last month.

In Malaysia, the numbers have yet to show any worrying sign, as the country’s inflation rate seems to be well on target.

Figures from the Department of Statistics show that consumer price index (CPI) for May rose at a tame rate of 1.6% from a year ago, almost matching the April’s rise of 1.5%.

Food prices remained the major contributor to the country’s inflationary pressure, rising 2.5% compared with 2.2% in the preceding month.

Most economists expect consumer prices in Malaysia to move higher in the second half of the year, albeit moderately, as the low-base effects fade and as domestic demand continues to strengthen on improved economic prospects.

No doubt, with subsidy rationalisation plan on the cards, inflationary pressures could accelerate further in the future. But with the Government reiterating its position of not rushing in to implement changes to the subsidy scheme, economists say the inflationary pressures in the country could still be kept at a restrained level for the rest of this year.

That is not to deny the fact that consumers will still be challenged by the rising cost of living in the country.

Malaysia’s CPI is based on a basket of goods and services, ranging from food and beverage, utilities and fuel, clothing and footwear to transport and communications. This means the actual prices paid by consumers for certain type of goods or services are actually much higher than that indicated by the CPI.

A customer shops at a wet market in Klang. Most economists expect consumer prices to move higher in the second half of the year. – AP

As it is, inflation expectations in the country are already building up. Such expectations tend to result in employees demanding for higher wages and businesses to potentially raise prices further to protect their margins.

In an annual survey conducted by international recruitment and human resource services agency Randstad, it was found that around 47% of Malaysian employees are expecting a pay rise of 5% to 10% this year.

On the other hand, the average salary increases this year, based on a survey by the human-resource specialist Kelly Services, is expected to range from only 4% to 5%.

“Many businesses are already struggling to cope with the rising cost of production that’s eating into their profit margins,” an economist with a local investment bank explains.

For instance, figures from the Department of Statistics showed that producer price index had remained on the up trend for the sixth straight month in May, as higher prices of domestic inputs continued to exert pressure on production costs.

“Eventually, businesses will have to pass on their higher costs to consumers – which would translate into higher prices of goods and services – to bolster their revenues and profit margins,” the economist explains.

Nevertheless, for the immediate term, the latest CPI numbers do suggest that there is less pressure for Bank Negara to raise interest rates in the next Monetary Policy Committee meeting in July.

The central bank had repeatedly indicated the importance of maintaining an accommodative interest rate regime to support the country’s economic growth.

Bank Negara has so far raised the country’s benchmark overnight policy rate (OPR) twice as part of the normalisation process this year. In fact, it became the first in the region to do so in March when it raised the OPR by 25 basis points from the record low of 2%.

Last month, Bank Negara revised the OPR again by another 25 basis points to the present level of 2.5%.

Some economists are betting on the central bank to pause its rate normalisation process for a while as a result of the mounting uncertainties arising from the 16-nation euro zone that are currently weighing on market sentiment and dampening global economic outlook.

Leading indicators seem to suggest that Malaysia’s gross domestic product growth have peaked in the first quarter of the year, after a double-digit expansion of 10.1% year-on-year.

The subsequent quarters are expected to record slower growth rates due to the waning effects of the low-base factor and economic stimulus measures as well as slower exports growth.

Source: The Star

KUALA LUMPUR: Effective August, Employees Provident Fund (EPF) members will be allowed to buy only quality funds with consistent returns over a period of time in a bid to safeguard their investments in unit trusts.

At the same time, investment by members into funds with a foreign exposure would be reinstated but with a limit of up to 30%.

Federation of Investment Managers Malaysia (FIMM) president Tunku Ya’acob Tunku Abdullah said yesterday that EPF had agreed with the federation to allow their members to buy performing funds – those that have higher consistent returns for at least three years to further instill trust and confidence in unit trust investment.

This means that funds with less than three-year track record and newly launched ones will not be sold to EPF depositors.

The reinstatement of funds with foreign exposure would enable EPF members to enhance their investment options and diversify their risk portfolio, he added.

In early 2005, Bank Negara liberalise the overseas investment rules whereby EPF members were allowed to purchase without any limits funds with foreign exposure.

Then in 2007, EPF disallowed it, stating among others, it needed further study on the impact of such funds performance.

To ensure consistent performing funds, FIMM would introduce a performance focus methodology to measure funds under the EPF Members Investment Scheme annually.

“Funds that consistently have higher performance relative to its peers in the same category will be made available for sale to EPF members. Those that generate returns but not as high as their peers and do not meet a certain criteria, will be suspended for sale.

“These funds can be re-instated when they eventually meet the criteria. The evaluation methodology for sale of funds as well as those with foreign exposure are expected to be implemented in August,” he said at a press briefing.

Tunku Ya’acob said currently more than 300 funds under the scheme would undergo the evaluation process and the final list would be announced in due course.

Out of this total, he expected 5% of the funds to be suspended for not meeting the relevant criteria, but would qualify if their performance improved.

A person familiar with the matter told StarBizWeek that successful funds would be listed on FIMM and EPF’s websites. “These performing funds would have their names on the websites but will not be given ratings as FIMM and EPF are not in a position to do so.

“Suffice to say that these funds have been evaluated with the right methodology. EPF members will benefit from this move,” the person noted.

FIMM executive director Lee Siew Hoong said the methodology would evaluate relative performance on funds among peers with at least three years of track record in line with international accepted practices.

A period of three years was deemed to be the minimum period to evaluate the longer- term performance of the fund as unit trust investment was for the medium to long term, he noted.

Lee said funds must meet certain criteria including consistency and risk-adjusted return performance before they are allowed to be offered to EPF members.

The methodology uses an international research house rating data to calculate the criteria, he said.

Source: The Star

IT’S going to happen whether we like it or not. So, best to prepare ourselves mentally and financially to face higher prices of goods and services when subsidies are gradually cut.

Last week, Minister in the Prime Minister’s Department Datuk Seri Idris Jala says the subsidies will have to go due to the Government’s widening budget deficit, currently a record RM49bil.

While he says the phased cuts over five years will not result in inflation going over 4% per year, the vast majority of people will still have to make some adjustments, both in their lifestyles and their investment decisions.

Concerns have also been voiced over how people will be able to cope with the rising cost of living since the average per capita income is around RM22,750 per annum.

The “phased cuts” will still put pressure on most people’s wages, which many feel are already low and will include a broadly defined middle-class.

The relatively low wages can be inferred from two sources – Employees Provident Fund (EPF) records, which shows that 70% of the fund’s 5.79 million active members as of past March have enough savings for a maximum of 10 years only.

According to the records, there were only 7,464 members as of the end of last year who have more than RM1mil in their EPF accounts.

The second source is the tax base, only three million out of an estimated 11 million workers pay taxes, meaning the rest do not earn enough to pay tax.

When faced with higher costs of living and lower incomes, a budget becomes ever more important but financial planners say most people either do not have a budget or only have the vaguest idea of how much disposable income they have for spending.

“It all boils down to having a budget but what’s of concern is that most people don’t have a budget so they tend to overspend,” CTLA Financial Planners Sdn Bhd managing director Mike Lee tells StarBizWeek.

They also recommend people diversify their income in order to ensure some security in their retirement plans. This is also the advise of EPF’s public relations general manager Nik Affendi Jaafar.

He says in a recent interview with Mingguan mStar that members should diversify their savings as what is in their EPF accounts will not be enough for their retirement assuming they live another 20 years after retirement at 55.

“We advise our members to diversify their income and not depend on their EPF savings for their retirement,” Nik Affendi adds.

Lee says the first rule of a budget is savings. “One must always save first after taking into account income tax, EPF and social security payments,” he says.

Lee recommends reviewing the budget every quarter and as a general rule of thumb, to save 15% to 20% of net income before allocating for other spending.

When it comes to making financial arrangements for investments, the same principle applies – “It will have to be adjusted according to the budget,” says Lee.

For those who have a regular income or who are still working, the impact will not be significant since the subsidy cuts will be gradual.

“The hardest hit will be retirees as they’ll have no choice but to make lifestyle changes,” Lee says.

Meanwhile MyFP Services Sdn Bhd principal consultant Robert Foo suggests that people to sit down and plan their budget, especially those with young families and have future financial commitments such as children’s education and so forth.

“They should sit down and plan. Otherwise they can hire professionals to advise them,” he says.

Foo says the multiplier effect on the cost of living from the increase of petrol and electricity (the most common inputs in costing) should be seen from a long-term perspective.

The Government, according to Jala, plans to increase petrol price by 10 sen to 15 sen by mid-year and thereafter an increase of 10 sen every six months until 2014 and reduce subsidies for gas, which will then increase electricity tariffs.

“Don’t just plan for the next six months. Know your financial situation – that’s the secret to coping with the long-term rise in the cost of living,” Foo says.

He adds that people must have a “wealth mentality” instead of a “cashflow mentality” where managing finances and investing is concerned.

“You cannot control cost of living but you can control income flow by diversifying it,” Foo says, adding that when planning long-term, higher cost of living is always taken into consideration.

Source: The Star

PETALING JAYA: Inflation rose for a fourth straight month in March, with consumer prices rising across the board led by increases in food prices and utility bills.

The Statistics Department yesterday said the consumer price index (CPI) climbed 1.3% in March to 111.7 from a year ago after it climbed 1.2% in February.

The index was flat compared with February.

A median forecast in a Bloomberg survey of 15 economists had expected a 1.5% increase.

Food prices, which accounted for 31% of Malaysia’s inflation index, rose 1.7% in March, while the cost of housing, water, electricity, gas and others fuels rose 1%, the report said.

The only category that saw a decrease in prices was clothing and footwear.

The tame inflation number could also have been influenced by the ringgit’s recent strength, which helped lower the cost of imported goods.

The ringgit had appreciated 4% against the US dollar since Bank Negara raised its overnight policy rate (OPR) on March 15.

The local currency gained 7% against the euro and yen during the same period.

Policymakers are scheduled to meet on May 13 to decide on the OPR.

Rising prices, albeit at a benign pace, may give room for policymakers to “normalise” interest rate, as the economic recovery picks up.

Source: The Star Online

ACCORDING to the United Nations’ projections, there will be about 1.2 billion people aged 65 years and above by 2025.

With numbers such as these, failure to address our health needs today could develop into a costly problem tomorrow.

As our affluence swells, our expectations of better healthcare, financial independence and a peaceful death increases.

But due to the high cost of healthcare, only a few can afford to become seriously ill.

While immediate concerns about rising healthcare costs and retirement fund structure require attention, fundamental long-term questions should not be neglected.

There is urgent need to address what will be very expensive demographic shifts within our lifetime.

The biggest risk

Unless you are among the lucky few with lifetime healthcare coverage, you may need to bear major medical expenses during retirement. Should you need assisted living while ageing, you would enter a whole new world of long-term financial pain.

Those who have seen it happen to family members or acquaintances know first-hand that the unpredictability of our personal health is the biggest risk in retirement planning. It is a nightmare that is unforeseen and rarely controllable.

According to the World Economic Forum 2009 report Transforming Pensions and Healthcare in a Rapidly Ageing World, the question of ageing societies from a perspective that integrates implications and solutions for both healthcare and retirement pensions was addressed.

In taking this integrated approach, which emphasised multi-stakeholder collaboration, the World Economic Forum was reacting to rising concern expressed by financial services and healthcare companies, employers, governments and society.

However, no single stakeholder can hope to tackle the challenges or make the most of the abundant opportunities. Success will require diverse, multi-stakeholder collaboration and innovative approaches.

How much is enough?

With the timing of this report, we are presented with a once-in-a-generation opportunity for transformational change in retirement planning for many of us in Malaysia.

There is a need for hybrid solutions to address the increasing cost of medical and healthcare products and services.

After all, illness or sickness can happen to anyone at any time. We can experience possible medical bankruptcy at any age but the worst time to experience it is during old age. Such financial depression could end our life earlier than expected.

The million dollar question: How much is enough when medical costs could be escalating at double-digit inflation rates as we age?

It is almost impossible to calculate as the amount required is subject to unpredictable variables like types of illness, medical fees, medicine costs and more.

Concerted effort from everyone

The ability for Malaysians to ensure financial sufficiency for medical and healthcare during retirement is becoming severely reduced due to skyrocketing medical costs.

A concerted effort from different stakeholders is necessary. An effective collaboration between the Government, insurance companies, pharmaceutical firms, healthcare providers and the community to keep the financial support and aid within affordable limits is required. Initiatives from all stakeholders are also required:

·Individuals should start early with personal savings, contribution to Employees Provident Fund, life and medical insurances and investments for old age care;

·Employers should consider medical benefits for individuals under employment beyond retirement age;

·The Government should provide medical and old age care subsidies and assistance, and tax incentives to make private health and medical care affordable;

·Insurers should provide affordable medical and age care insurance that caters for specific needs and age;

·Price management is required on private health and medical advice, services, and products (food and medicines) to make them affordable; and

·Family and community assistance should focus on the provision of home care, nursing help, food, accommodation and emotional support with love, care and affection.

These ideas and strategies may not be comprehensive. Neither are they overnight solutions. They need adequate research studies and timely and appropriate decision-making processes from relevant parties.

The private sector can still benefit by catering to the needs of the elderly and the Government can facilitate old-age security while helping to overcome financial pressures on private healthcare systems and retirement plans for current and future generations.

In the bigger picture, it can be a collective and meaningful corporate social responsibility effort and initiative to turn a “greying society” into a “silver society”, in which the elderly live their golden age without financial worries associated with ageing and ill health.

·Yip is a personal financial coach and also founder and CEO of Abacus for Money.

It’s look like I will make howcast.com as my everyday visit website. There you can find many cool and useful videos published sorted by categories. What’s important is how we use it to improve our daily work and life. I like Business and Finance category because they give tips and tricks about personal and business advice.

Here one of the video that published under this  category. With video, they can how to save money everyday. Usually we just got reading, but now got video some more.

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congenital mungkin tidak dilundungi di bawah pelan  juvenile biasa, dengan PRUmy child, ibubapa kini boleh yakin bahawa bayi mereka akan dilindungi sepenuhnya dari sebelum lahir lagi!

Secara sepintas lalu, pelan ini memberikan:-

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Terdapat 2 manfaat untuk tujuan simpanan pendidikan iaitu PRUsaver kid dan PRUedusaver yang direka untuk meraih pulangan

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Anada apabila mereka memasuki institusi pengajian tinggi pada bila-bila masa di antara umur 18-25 tahun.

Untuk penerangan lebih lanjut dan iilustrasi jualan, sila hubungi saya di 019-383 1240 atau email saya di customer@wmafendi.com. Hadiah menarik menanti 100 peserta pertama!

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Invest ahead to generate extra money after retirement.

WHEN I was growing up, I aspired to join the Government. The main reason so was that I could be eligible for a pension scheme. This came from the fact that my parents were both civil servants and they got to enjoy the benefits of a pension when they retired. They still do.

While it’s not much, it’s comforting for them that at their age, they would continue to have an income for as long as they lived. I wanted to be able to look forward to that as well.

Alas, fate – or was it free will? – had a hand to play in my career choice and I ended up taking a job in the private sector. Seeing as I’m having fun doing what I do, I don’t see myself switching careers any time soon. So there goes my plan of getting a pension.

Time to switch to Plan B, namely, the Employees Provident Fund (EPF). It is intended to help employees from both private and non-pensionable public sectors save a fraction of their salaries in a contribution scheme. The contributions are invested to generate income and the funds in the contributors’ accounts are to be used in the event that the employee is temporarily or no longer fit to work.

It primarily applies to retirement, but sickness, disabilities or unemployment are also covered. The EPF also provides a framework for employers to meet their obligations to employees.

As a retirement plan, money accumulated in EPF savings can only be withdrawn when members turn 50, during which they may withdraw only 30% of their balance. Members who are 55 or older may withdraw the entire sum.

Recently, the EPF board declared a dividend of 5.65% for the financial year ended Dec 31, 2009, up 115 basis points over the 4.5% paid for 2008.

According to Fundsupermart.com Malaysia, over the past five years, EPF has been distributing an average annual dividend of 5%. The average real dividend rate for the past five years was 1.7%, after reflecting an average inflation rate of 3.4%.

With that, the important question to ask is: Will the savings from our EPF be enough to sustain us in our retirement years?

Expert advice

In his Personal Investing column, “Enough money for retirement?” last year, MRR Consulting investment adviser and managing partner Ooi Kok Hwa says as the average Malaysian lived to about 75, those who retire at 55 would need to manage their EPF savings for 20 years. But most retirees spend all their EPF money within three years of retirement, he claims.

Ooi provides a breakdown of how a retiree can manage his EPF savings for 20 years.

“We will assume a starting pay of RM1,500, growing at the rate of 8% per annum; an average bonus of two months per annum, average EPF returns of 5%, total EPF contribution of 23% (employer: 12%, employee: 11%) and inflation rate of 3%.

“Our analysis shows that if we are able to live with just one-third (or 33%) of our last drawn salary, the EPF money should be able to support us for 20 years until we pass away at 75.”

According to Ooi, if a person’s last drawn salary is RM13,976 at 55, he can only afford to spend one-third or RM4,612 per month after retirement (1/3 x RM13,976).

He stresses, however, that the computation was based on the assumption that a person would still be able to generate 5% returns after retirement.

“Everyone has different financial situations. If possible, we need to build our own investment portfolio apart from the EPF savings. We may need to seek some part-time jobs after retirement if our financial resources do not permit us to stop working,” he wrote.

“Besides, we need to clear all our outstanding debts before retirement. We also need to buy enough life and medical insurance for ourselves as well as set up education funds for our children.”

Financial planner Wilson Low says a person who’s concerned about his or her future financial well-being has one clear option – invest.

“Anyone who’s worried about not having enough money in their old age should do something about it, to make sure that you do have money to sustain you when you’re old and not working any more,” he adds.

“The obvious thing to do is to invest in something that can help generate an income for you when you’re older. There are various investment avenues out there and with proper planning and research, financial independence is not an impossibility.”

What some have done

Rita (not her real name), is a retired nurse. After working for the Government for 30 years, she worked in the private sector for a further nine years because she needed the money.

However, she admits that without her pension, it would be difficult to make ends meet. “There are things like your children’s education or repairs to the house that you need to think about. Without the pension, the EPF definitely would not be enough.”

Rita adds that as a former civil servant, she will always be eligible for free treatment at government hospitals. “This is especially important since most medical expenses will come up as one gets older,” she says.

Rita adds that EPF also used to declare higher dividends, between 6% and 7% in the 1990s.

Kamala (not her real name) was a former employee of the Rubber Research Institute of Malaysia. A Government-based organisation initially, it was privatised in the 1990s and its employees were asked to chose either a pension or EPF scheme as a retirement option.

Kamala chose the EPF scheme, a decision she claims she regrets. “The money finished quickly as I had many financial obligations like my children’s education and housing loan. I also had to undergo an expensive operation, the cost of which would not have been an issue if I were a civil servant.”

She is however thankful that today, her children have all grown up and give her husband and her money on a monthly basis. “We have also invested our money in property. So financially we are all right.”

Meanwhile, Kong, an information technology executive in his early 40s, says he spends about RM4,000 a month on household expenses, his children’s education and an outstanding home and car loan, among other financial obligations.

“I’m spending so much every month that I hardly have enough to save. Fortunately my wife is also contributing. After 55, it’s definitely not going to be easy. I’ll probably have to continue working until my kids can support themselves,” he adds.

Source: The Star;eugenicz@thestar.com.my