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Should the objective be to live a life. style of choice during retirement, it is obvious that there is need to begin planning well ahead of retirement and ensure there is sufficient income to conduct a lifestyle of choice during retirement.

RETIREMENT PLANNING MISCONCEPTION #1:
I do not need as much money during retirement Some financial planning textbooks say that you will need approximately 60% to 80% of your pre-retirement income in order to maintain a lifestyle similar to that which you currently have. This may be true if you maintain your current lifestyle. However, when you retire, you will have more free time for travel, leisure activities, hobbies, and other things you might like to do during your retirement years. All of these activities may mean an increased expense in those chosen areas. In addition, medical expenses will increase at a faster rate than they likely did during your pre-retirement years. Today, with a better diet and awareness of the need for exercise, individuals in their 50s and 60s are generally healthier than previous generations and may live longer. Although the current life expectancy based on the life insurance mortality

RETIREMENT PLANNING MISCONCEPTION #2:
I can start planning for my retirement a few years before my retirement Yes, certainly you can leave retirement planning to a few years before the date of your retirement. However, you must realize that to live a life-style of choice during retirement, there is much serious planning needed. For one, it takes time for the accumulation of wealth. The sooner you start to accumulate assets and plan for your retirement years, the better, and the less you will need to set aside each year in order to achieve the same objective. You need some thought, soul-searching and analysis to determine what is really important to you since, for most of us, this will mean giving up some objectives in order to achieve others. For most of us, there is need to balance between the current financial requirements of raising a family and the inherent obligations that come with the joy of having a spouse and children in the family. The common money crunches include college funding for the children, weddings, buying car(s), properties, holiday travels and money to support aged parents and relatives.

Balancing the current and immediate needs with that of your retirement objectives is not an easy task. The consensus is that you need time for accumulation of retirement funds --the longer the time, the better the chance of having sufficient retirement funds at start of your retirement.

RETIREMENT PLANNING MISCONCEPTION #3:
My savings acount will provide enough income for my retirementFor most people (assuming they have not depleted it through the years), savings are only good for a supplemental fund that complements your total retirement fund needs. It has become ever more important for you to accumulate your investment retirment portfolio.

RETIREMENT PLANNING MISCONCEPTION #4:
All of my assets are in safe vehicles for long-term accumulation and do not need to be watched closely The fact is that all investments need to be watched. The safest investment available today, namely, fixed deposits does not really help you to grow your wealth. At best it does protect your money but in the structure of a fixed deposit you only receive a very small interest accumulation each year that is insufficient to make a significant impact in terms of wealth accumulation. You may in fact be suffering from "purchasing power loss". For example, if you only rely on fixed deposits to grow your wealth, and your fixed deposit pays 3.7% per annum but your life-style runs with an inflation of 6% per annum, you are suffering a net 2.3% purchasing power loss. To overcome such loss of purchasing power, you need to look seriously at what other investment instruments can provide you a net return higher than that of yourlife-style inflation

RETIREMENT PLANNING MISCONCEPTION #5:
I can always use the equity in my home to add to my retirement income while it is possible that the above scenario could occur, it is unlikely that this will add much to your retirement income. Hyou use the home you are living in to add to your retirement income, you may be under pressure during your retirement years as it required that you charge your home to raise a loan amount for an unproductive use, namely to pay for your living expenses. This is certainly not a good solution. The other option is to downsize your own home usaage and rent out part of your home to obtian rental income. Home equity annuities are becoming an option for some retirees to consider.

RETIREMENT PLANNING MISCONCEPTION #6:
Health insurance will take care of my health needs during retirement Some policies cover only up to age 60. The more generous policies COver up to age 80. Beyond the age limit set, there is no more health cover. In the later years of retirement, there is need for health care but such long-term care insurance coverage is not available in Malaysia as yet. In short, you need to look after yourself and foot your own health care bills.

RETIREMENT PLANNING MISCONCEPTION #7:
If I need it, my family could always help me out There was a time in history where people held the common belief that the more children they had, the better off they surely will be during their retirement years. Yes, that may be so when the whole family used to be living under the same roof. Alas, today with higher standards of living and the need to make a living for oneself, plus the dispersion of the family members from under one roof, that old concept does not work anymore. Today, it is much better to plan to be independent of family and Children during one's retirement years. That means to build up sufficient wealth and to be financially independent during one's retirement years, and to not be a financial burden on any member of the family, Sometimes, however, this is easier said than done, but the sad fact of the matter is that this may indeed be the necessity going forward.

RETIREMENT PLANNING MISCONCEPTION #8:
Money is everything when it comes to retirement planning Noting could be further from the truth! W:hile money is important, it is the lifestyle decisions that are really the most important concerns for your retirement years. M9ney is impOrtant in that it is needed in order tdfinarice the lifestyle d~ions you make, and for thisreasoilit is important to pIan as early as possible for funding the lifestyle you would like to lead- where you live, how and where you will vacation, whatyou will do with your spare time and a realisation,Of your participation in other interests are extremely important issues to factor for your retirement years. You may even decide to start a second busineSS, enter a different career, or perhaps even possibly making one of your hobbies or interests your remaining life's work The focus here is that a comfortable and successful retirement is more about the fulfillment of objectives and not the accumulation of money. It is about enjoying your life to the fullest, which is based on tour defination of happiness. Money is a tool to help you achieve these ends, but it is not the end itself.

In conclusion, you really need to ask yourself whether or not you are basing your own financial independence upon any of the above-mentioned "misconceptions". If you are, it is time to take a serious look at your financial independence at retirement. Today, there are many qualified financial planners, able to assist you to get on track with your retirment planning so that your retirement years can be lived to their fullest in the manner you wish and not become constrained by the mistakes you made in previous years.

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