AIA asks pertinent questions on retirement funds
View(s):Against the backdrop of report which suggest the government is about to marry the EPF and ETF funds, it’s pertinent to take a moment to think about your retirement post and the AIA Insurance is drawing customer attention to questions pertaining to them having enough cash to retire comfortably. “Have you taken into account the cost of inflation and increase in day to day expenditure, as you grow older? Is Rs. 1,880 per month enough for your retirement?” were the questions posed in a media release by AIA Insurance which said that according to statistics the EPF + ETF pay out for 2012 amounted to Rs. 57,277 million.
“When divided by the number of retiring members that came to an average pay out per retiree of Rs. 479,000. Assuming a typical retiree will live 25 years after retirement, and assuming a 6.5 per cent inflation and 8 per cent investment return per annum, he/she will only get a monthly income of Rs. 1,880!,” Frank Munro, Chief Actuary at AIA Insurance was quoted in the release as saying.”It is safe to assume that a majority of employees who rely only on their EPF and ETF in retirement will not have sufficient funds. In fact, most of them will have less than half a million in hand at their retirement.
This means you’ll have to forget about living the comfortable lifestyle you’re used to let alone that dream vacation with your partner or the glint in your grand kids eyes when you gift them their favourite toys.”Sri Lankans are living longer due to improved medical and social conditions according to the release. “An employee who retires at the statutory retirement age of 55 can expect to life another 25 years, up till 80 years of age. These 25 years have the potential to be truly wonderful; void of work and responsibilities, they are meant to be spent doing what you love with the people you love.”