Retirement Forum 2017: The Coming Third Age Crisis

Transcription

1 Retirement Forum 2017: The Coming Third Age Crisis Ismitz Matthew De Alwis Executive Director/ Chief Executive Officer November 2017

2 Precipice of the Greatest Retirement Crisis in the history of the world. Millions of elderly Americans, Baby Boomers and others slipping into poverty:- - Too frail to work - Too poor to retire Average 401(k) for 65 USD 25,000

3 Don t Let this Happen to You 2

4 Population Figures 3

5 Retirement Readiness 4

6 Malaysia s Demographics Future Socio Economic Issues? Those aged make up the biggest portion of the population (10.8 million or 38.2% of the population). Ageing Population: By 2020, 3.2 Millions of Malaysians will be of retirement age 5

7 Challenge #1: Living too long the growing ageing population Source: The Star Online, 9 July

8 Challenge #2: Impact of Inflation on living costs. Inflation was at 3.6 per cent on a year-on-year basis in June 2017 compared with a 3.9 per cent increase in May Transportation (10.5%) Food & non-alcoholic beverages (4.3%) Recreation services & culture (+3.0%) Restaurants & hotels (+2.5%) Housing (+2.2%) Water (+2.2%) Electricity (+2.2%) Gas & other fuels (+2.2%) Source: Department of Statistics Malaysia, 19 July

9 Challenge #3: Funding Children's Tertiary Education with rising education costs Medicine Engineering Law Business IT RM RM RM RM RM Local Public 12,710 8,550 7,740 7,560 9,040 Private 255,400 66,000 62,040 43,560 49,610 Abroad Singapore 326,822 92,709 88,788 78,923 92,709 US 641, , , , ,432 UK 669, , , , ,180 Australia 725, , , , ,473 Source: StudyMalaysia.com

10 Challenge #4: Increased need for healthcare In 2017, the top 5 killer diseases in Malaysia are: 1. Coronary heart disease 2. Stroke 3. Lung diseases 4. HIV/AIDS 5. Diabetes Sources: The Borgen Project and World Health Organisation 35% of private medical healthcare expenditure was "out of pocket indicating that Malaysians generally have to pay a hefty amount for medical services. Sources: The Malay Mail Online, 2016 Procedures 2000 (RM) % Increase 2005 (RM) % Increase 2010 (RM) % Increase 2015 (RM) Open Heart Surgery 30, ,000 30% 52, ,000 Neuro Surgery 32, , , ,000 Total Knee Replacement 14, , , ,000 Total Hip Replacement 18, , , ,000 Spine Surgery (MISS) 22, , , ,000 Angiogram 15, , , ,000 Appedicectomy 4, , , ,000 Source: Ramsy Sime Darby Ara Damansara Medical Centre,

11 Challenge #4: Increased need for healthcare (cont d) in an environment of fast rising medical costs! The research pointed out that the cost increases were being driven by non-communicable diseases those that cannot be caught from other people but are frequently caused by the lifestyle choices of individuals such as smoking, lack of exercise and a poor diet. Source: 10

12 Are Malaysians Retirement Ready? Average savings for members between the ages of years comes up to only RM177, Members should target having at least RM228,000 in their EPF accounts when they reach 55 * * Article in The Star 29 Dec 2016 EPF worries about withdrawals too soon by retirees Source: 11

13 Some Worrying News.. Source: The Star Online, 2017 Source: New Straits Times, 2017 Source: The Edge Markets, 201 Gen Ys relying on high-cost borrowing, 38% reported to be taking personal loans, 47% have expensive credit card borrowings, only 28% were financially literate Impulse-buying is perpetuated by their need to conform to a certain type of lifestyle or image often created by social media Lack of engagement with financial advisors probably stems from their skeptical view about the value of financial advice itself 12

14 Are you financially prepared to handle all these? Longer average life span Increasing lifestyle costs Funding tertiary education costs Increasing need for healthcare 13

15 14 The Big Retirement Problems RETIREMENT SAVINGS RETIREMENT CONCERNS RETIREMENT SECURITY RETIREMENT WELL BEING Adequacy Sufficiency Dependency Outliving savings $ Financially secured Happy Years Sustainability Inflation Financial uncertainty $ Worry Years

16 The 3 Stages of Retirement Yes, even when you reach retirement, it s not the end of the road. We ve broken it down into THREE phases. GO GO Newly retired, eager for the finer things in life Balance the increased costs with lower transportation or wardrobe expenses SLOW GO Body slowing down Additional healthcare costs Less travel & hobbies No longer able to financially support family NO GO Long-term care costs, hospitalisation etc. Daily medical expenses or medical equipment cost 15

17 Saving When You re Young Making the most of out of your youth! Minimal savings amount Gradually increasing Increasing rapidly Stagnant and reducing New to Workforce Young & single Establish good money habits Tackle credit card debt Pay student loan Create emergency fund Family Oriented Married with kids More commitment Higher income Continue to hack away debts Reassess insurance needs Retirement planning Career Peak Experienced in workforce Stable Well-advanced in career Make retirement savings a priority Focus your investments Retirement Phase Debt free/travel Medical costs Elderly care Turbo-charge your retirement savings Reduce expenses The most ideal period for you to start accumulating savings in EPF and PRS Time to conserve and lead a sustainable retirement Adapted from 16

18 Saving When You re Young Who ends up the winner here? Today 10 Years from Today Value of Savings 20 Years from Today * Saves RM100 per month over 20 years RM59, Gary Saves RM200 per month over 10 years RM36, Ben * Assume that rate of return on savings is 8% per annum 17

19 Saving When You re Young Making the most of out of your youth! Why should you start now? ALL YOU HAVE IS TIME COMPOUNDING INTEREST AVOID THE DEBT TRAP FINANCIAL INDEPENDENCE Starting early means you essentially have more time to save up more money as compared to starting out only when you turn 30. Compounding interest; see your contributions grow! It ll help you to avoid debt like the plague; you ll learn to appreciate having money put by to pay for things needed, thus avoiding debt and interest payments Nothing beats knowing that you are financially independent at the peak of your life! 18

20 The Private Retirement Scheme It s good to have a safety net in place. There is always the risk of sudden occurrences in life that channels your EPF savings everywhere else but your retirement pool. By having an alternative pool of savings, you re at least assured of a certain sum when you retire. This is where PRS comes into play. Example: Savings EPF PRS Property 19

21 Revised PRS Youth Incentive (as per Budget 2017) Source: 20

22 Benefits of Investing with Us Tax Relief Up to RM3,000; there s still time for your 2017 tax assessment! Consistent Returns We strive to offer consistent returns for our clients We offer a full range of conventional and Islamic core funds under the OnePRS umbrella. Conventional & Shariah Options Decide on your investment frequency, amount & risk tolerance. Flexibility 21

23 Benefits of Investing with Us What can KenWealth do For You? Access to (7) SEVEN providers PRS funds, all from one single touch point Through our KenWealth by Kenanga platform, we offer clients more choices from our provider partners. One-stop information center for you to ask questions about various providers or funds Saves you time and hassle. Convenience via KenEASY to monitor all your PRS funds in one consolidated view 22

24 The Retirement Management Formula 23

25 Plan Your Journey, Define Your Future.

26 Adding Colours to Your Retirement with Kenanga Investors

27 Introducing Kenanga OnePRS Conventional Shariah 26

28 27 Kenanga OnePRS Scheme Core Funds Conventional Kenanga OnePRS Scheme offers 3 core funds to suit your different life-stages. Age below 40 Age 40 - below 50 Age 50 & above Retirement Challenges Not saving at all Not saving enough Inflation eating into savings Investment Objective Capital growth Returns through investment in equities / bonds Income whilst providing capital preservation Your SOLUTION Kenanga OnePRS Growth Fund Kenanga OnePRS Moderate Fund Kenanga OnePRS Conservative Fund

29 28 Kenanga OnePRS Scheme Core Funds Shariah Kenanga Shariah OnePRS Scheme offers 3 core funds to suit your different life-stages. Age below 40 Age 40 - below 50 Age 50 & above Retirement Challenges Not saving at all Not saving enough Inflation eating into savings Investment Objective Capital growth Returns through investment in equities / sukuk Income whilst providing capital preservation Your SOLUTION Kenanga Shariah OnePRS Growth Fund Kenanga Shariah OnePRS Moderate Fund Kenanga Shariah OnePRS Conservative Fund

30 29 Our Performance Track Record Kenanga OnePRS Scheme Fund Performance (% Growth) YTD 1M 3M 6M 1Y 3Y Since Launch Kenanga OnePRS Growth Benchmark Kenanga OnePRS Moderate Benchmark Kenanga OnePRS Conservative Benchmark Kenanga OnePRS Shariah Equity (Non-Core) Benchmark OnePRS Growth Benchmark: Composite of All MGS Index (30%) and FBM 100 (70%) 2 OnePRS Moderate Benchmark: Composite of All MGS Index (40%) and FBM 100 (60%) 3 OnePRS Conservative Benchmark: Composite of All MGS Index (80%) and FBM 100 (20%) 4 OnePRS Shariah Equity Benchmark: FTSE Bursa Malaysia Emas Shariah Source: Lipper Investment Management and Novagni Analytics and Advisory as at 30 Oct 2017

31 Our Award-Winning History Best Equity Group Award (Islamic) 2017 Investor s Choice Fund House of the Year 2017 Core Equity (Malaysia) Kenanga Growth Fund Malaysia Best Institutional House Malaysia CIO of the Year Lee Sook Yee 2016 Asia Investment Management Award Malaysia Equity Fund (3 years and 10 years) Kenanga Growth Fund Private Retirement Scheme (Growth) Kenanga OnePRS Growth Fund Malaysia CEO of the Year Ismitz Matthew De Alwis Private Retirement Scheme (Conservative) Kenanga OnePRS Conservative Fund 30

32 Talk to Us Today! Kenanga Investors Berhad ( P) Level 13, Kenanga Tower, 237, Jalan Tun Razak, Kuala Lumpur. Tel: Fax: Website: Investor Services Hotline:

33 Disclaimer Disclaimer This document is a marketing presentation prepared by Kenanga Investors Bhd (KIB) and is strictly for discussion and information purposes only. It should not be circulated to any third party without prior approval of KIB. Information provided herein including any expression of opinion or forecast has been obtained from or is based on sources believed by us to be reliable, but there is no representation or warranty, express or implied, is given with respect to the accuracy, completeness, sufficiency or usefulness of the information, or that any future transaction will conform to the terms hereof. Any decision to proceed with a transaction to which this information relates should be made solely in reliance upon final documentation agreed between us. It is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. Neither Kenanga Investors Bhd, nor any of its affiliates, directors, employees, agents or advisers or any other person accepts any liability to any person in relation to the distribution, possession or delivery of this document in, to or from any jurisdiction. Any projections or other estimates in this information, including estimates of returns or performance, are forward-looking statements based upon certain assumptions and are preliminary in nature. Actual results are difficult to predict and may depend upon factors within or beyond the issuer s or Kenanga Investors Bhd s control. Actual events may differ from those assumed and changes to any assumptions may have a material impact on any projections or estimates. Other events not taken into account may occur and may significantly affect the analysis. There can be no assurance that estimated returns or projections can be realized or that actual returns or performance results will not be materially lower than those estimated herein. Such estimated results, returns and projections should be viewed as hypothetical and do not represent the actual results/returns that may be achieved. Price and product availability are deemed to be indicative only and are subject to changes at any time without notice. You should also consider fees and charges involved before investing. The First Replacement Disclosure Document in relation to the OnePRS Scheme dated 28 Oct 2014 and the Disclosure Document in relation to the Shariah OnePRS Scheme dated 18 August 2016 have been registered with the Securities Commission Malaysia, who takes no responsibility for its contents, is obtainable at our offices. Application for Units can only be made on receipt of application form referred to in and accompanying the Disclosure Document. Investors are advised to read and understand the disclosure document and the product highlights sheet and consider the principal risks, fees and charges involved before investing. Unit prices and distributions may go down as well as up. A Fund s track record does not guarantee its future performance. The past performances of the funds under the OnePRS Scheme and the Shariah OnePRS Schemes are not indications of their future performances. Investment involves risks including a possible loss to the principal amount invested. KIB/KIIB is committed to preventing Conflict of Interest between its various businesses and activities and between its clients/directors/shareholders and employees by having in place procedures and measures for identifying and properly managing any apparent, potential and perceived Conflict of Interest by making disclosures to Clients, where appropriate. 32