People are always talking about investments for retirement. Financial investments, that is. If you start treating your health as an investment, though, you could find that exercise is a terrific retirement strategy worth its weight in gold.

Physical fitness can be a cash-free retirement investment that pays off handsomely.

Cash – free you ask? Lots of men and women spend big bucks on equipment and sports clothing, spas and fancy gyms and personal trainers. But aside from buying a decent pair of sneakers, you may not need to spend much cash to launch this part of your personal portfolio.

And that’s because what you’re investing is not really money—but your time and energy.

Think of exercise like your piggy bank (OK, a lithe, physically fit, aerobically conditioned piggy bank!). If you regularly invest a modest amount of time, you’ll likely find as the years go by that you’ve racked up savings in three areas:

First, you can save hard cash. You’ll save by not spending on doctors’ visits and medications.

Second, you will likely save yourself from emotional stress. Exercise is to mood and self esteem what yeast is to dough: a leavening agent. That is, it’s a well-known antidepressant. And, to the extent that staying fit keeps you healthy, you also save the aggravation and sheer inconvenience that often accompany sickness.

Third, exercise takes time—but on balance, it may actually save you time. Regular exercisers swear by this seeming contradiction, explaining that because exercise gives them more energy, helps them focus and puts things in perspective, they are more efficient.

So what are you waiting for, grab that old sneakers and start jogging at afternoon every other day.

[via Buzzle]

First of all, do you know that a medical and health insurance policy is generally designed to help you cover the cost of private medical treatment such as cost of hospitalisation and healthcare services, if you are diagnosed with covered illnesses or have had an accident.

Just imagine the cost of not having any health insurance. If you are involved in an accident, or contract a serious illness, you have to pay the hospital bills from your own pocket. Prior to admitting to certain private hospitals, you would also have to pay a deposit. If your family members, i.e. your spouse or children, get seriously ill or hurt, the medical costs can lead to a total depletion of your savings. In some cases, it may even cause bankruptcy!

Another reason is that your family will have to opt for public health care facilities, and wait in line with hundreds of other patients. Besides that, you still have to pay for expensive operations that are not covered under public health care.

I want to relate to you a true story which happened last night. I was frantically trying my best to assist my client to see which hospital had neurosurgeon facility and would accept an seriously injured accident victim from another hospital.

You see, last night my client’s uncle was involved in a very bad motorcyle accident and was immediately rushed to a public hospital. Due to the severity of the injury, a neurosurgeon was required but unfortunately that particular hospital did not have the necessary facilities. My client was left in a dilemma. Her uncle was already admitted to the hospital but nothing could be done at the moment because the hospital did not have neurological facilities.

You might ask, why wasn’t the injured sent to a hospital which had the necessary facility in the first place? Well you see, her uncle did not have any insurance medical card. Fees at private hospital as you know are costly and the expenses might be too much for the family to bear. Therefore the family had no choice but to send the injured to a public hospital. For this case, the family did not expect that certain facilties were not available at public hospitals.

Sad to say, that in such a time where life or death is at hand, the family was ’stranded’ in a hospital where the required facility was not available. There was also a tricky situation where once the injured was admitted to a particular hospital and if the family wanted to send the injured to another hospital, the attending doctor at the current hospital was required to call the hospital to inform of the injured’s current situation. Once the hospital accepts the injured’s condition, only then can the injured be transferred to the new hospital.

Can you imagine how much time was wasted to settle this, when at the beginning if the injured had a medical card, he or she would have been immediately sent to the best hospital available and operated on at once!

I believe I need not have not stress anymore on the importance of medical insurance. For those of you who have good health and still do not have medical insurance, go and get a medical card for yourself. Get yourself protected! For those who already have a medical card, well done! You have done something good for yourself.

[via Malaysian Insurance Blog]

1. A Brief History of Retirement

ChampDog explains how human civilization comes to the term of retirement and what happen before people do retire. It’s an interesting story and I’m sure you will like this brief history of retirement.

2. Health and Wealth

Learn why health is more important than wealth in preparing yourself for retirement.

• Not taking full advantage of your company retirement benefits

You should invest as much money into your company retirement plan as you can afford. At the very minimum, you should invest enough to get your company matching funds if they are offered.

This is only applied to private employees. Here we have EPF fund ( it’s called 401K in the US). Try to contribute as much as possible to take advantage of matching dollar contribution from your employer.

• Withdrawing money from your retirement plan

By withdrawing money from your retirement plan, you lose valuable interest that is extremely difficult to replace. Some plans allow for hardship withdrawals and/or loans but you must be careful when taking advantage of these withdrawals. In addition to losing interest, you could face penalties or early withdrawal fees.

We like to use EPF money as much as we could. If you ever need to do this, do that for your future sake . Remember that the money is for your future self, so respect it.

• Not actively monitoring your investments

Monitoring your investments makes sense so that you are aware of any discrepancies. Monitoring also alerts you to how well your investments are performing or not performing. If you are carefully tracking your investments, you will be better equipped to know when to switch to a different strategy.

• Relying on pension for your retirement income

While pension might provide a substantial portion of your retirement income, you should have other means of income as a back up. It’s best to have a portfolio of investment and personal savings in addition to pension when you retire. You don’t want to stuck with the half paycheck for your whole life, do you?

• Relying on your kids

Living in Malaysian community which value family more than I have seen in another part of the world, many of us depends mostly on our kids to take care of us in our old age. This becomes some sort of investment to us. While the term ’investment’ is highly inappropriate but the concept is still there. While it’s a bonus to receive money for them, we should at least have our own plan to take care of ourselves. Kids these days have lots to worry for themselves.

• Forgetting to review your plan regularly

If you forget or ignore reviewing your retirement plan on a regular basis, you might be losing a portion of your retirement income. You need to periodically review your asset allocation, your balances, your goals, and so on to insure you are making the most of your plan.

• Practicing poor asset allocation

Poor asset allocation can be financial suicide. What if all your investments are in one stock and the company goes bankrupt? The secret is to diversify so that if one investment decreases in value, another will hopefully increase.

• Putting All Your Money in Savings

When we come to an old age, our risk tolerant become less and less. Well, that doesn’t mean that we have to put our money in savings account or at best in fixed deposit. While we can’t tolerate high risk as we did in our twenties, putting the money where it is rotted by inflation is not the answer. Find some more conservative investments that give more returns but still in acceptable gamut of risk (e.g ASB)

• Relying too heavily on your company stock

Your company stock is a very good way to save for your retirement especially in your company retirement plan. This can be dangerous though if your portfolio consists of mostly company stock. All companies have lean times and some could have mismanaged finances that could result in bankruptcy. It’s best to have a good investment mix in your retirement account.

I never heard of employees being given company stock for retirement plan in Malaysia. However, I just want to point out that this is the biggest mistake. If ever that your company in trouble, or they have to fire some other employees to cut cost, this will effect its stock value, just in time that you need money the most, if you are one of them.

• Not taking retirement planning seriously

This very well could be the worse mistake a person can make about his/her retirement plan. Even if you are a very young person, your retirement plan should be a serious priority. By starting early, you can grow quite a large nest egg and might just be able to retire early. A lot of people feel they have plenty of time to worry about retirement planning once they have their home, children through college, the new Hummer, and so on. My answer to these people is to think about the life style they might want to keep once the paycheck stops.

Bottom line is to take your retirement planning efforts seriously, diversify your investments, save regularly, and keep your goals in mind.

[heavily modified from Retireplan.com]

This is one of the posts for Retirement Week. You can find more post here.

To help us out, Azhar Khamaruzaman has came out with his useful estimating calculator. With just seven boxes to fill, this calculator will estimate how much monthly investment (or lump sum) that you need to achieve your desired annual income in your retirement years. Pretty useful and motivating stuff. (link to download after jump)

The yellow boxes that you need to fill are intuitively understandable. However, if you have troubles with it, just leave a comment below. We would be glad to answer.

Download: Retirement Plan.xls

Don’t forget, if you have any knowledge to share about retirement, write it in your blog and email me the URL or just email me your whole article.

To facilitate people to find all posts in the week, I’ll put all the posts in 7 Days to Better Retirement category. You won’t miss it.

You can show your commitment in this knowledge gathering in several ways:

1. Leave your thoughts in comment section of each post. Ask a question or share any knowledge that you might have learnt recently about having a better retirement.
2. Make your own post in your own blog regarding any topic pertaining to retirement and then email me with the URL. If you don’t have a blog, just email me the whole article instead. I would gladly publish your article.

The first posting will start this Monday and will be continued until Sunday. I’m looking forward for this exciting week.