Friday, May 28, 2004

Is retiring a happy occassion?

I am revisiting this subject because I found out after retiring for more than 2 years now, that many people refuse to accept that they have retired from an organisation where they have worked over for so many years, probably half of their lives in that organisation. And probably in that organisation they have reached a certain level where they were in 'power', and sometimes they feel that without them the organisation will not function as effectively as when they were there. I have seen and met many such people and I sometimes wonder if they ever realised that they have already left the organisation and so should leave it at that. Let someone new manage the organisation, a new blood who probably can manage the organisation better than what the retirees have been doing before. The retiree must let go.

Then there are those I found who will pull rank over their own retiree colleague. "I was so and so when I was in that organisation, so you have better hear what I have to say" or "I was your boss, so I am always right" or "What do you know about that organisation, I was a very high ranking officer of that organisation so I know why we did that and this" or even "If you do not respect me as a 'senior' retiree I will make sure that you will be miserably treated when you visit that organisation". Or something similar to the effect that they are still superior and in power over you. I have seen cases where they will not even want to mix with the 'junior' retiree or 'junior' resignee because they were junior in that organisation where they were from. These people are to me the rubbish of society, still pulling rank when they have no more rank, not even a small dust of it.

Happy retirement? Not to them. They think that they are still there.

Food for thought.


------------------Retires, some left in search for greener pastures and other might have left just for the sake of leaving looking for the gold at the end of the rainbow. This subject I am going to write about is focus on retirement in general. This is a very personal idea which I want to share, any similarity to other peoples idea of to the official documents are just coincidental.

What is retirement?. My small little Oxford dictionary defined retire as: leave office or employment, especially because of age; cause (employee) to retire; withdraw, retreat, seek seclusion or shelter. I think other definitions may not be applicable on the subject focus I want to write on.

What cause most of us to retire? Age factor is the main cause. Of course sometimes its the health factor. I would like to narrow the write up to age factor.

At what age do one retire? This basically depending on in which country you live in and on what job you are doing. In certain western countries they retire at the age of 65 years, but in this country the Govt. servants once upon a time had to retire at the age of 60. But the Govt. then reduced it to 55. In PETRONAS as most of us knew the retirement age was 60 until recently when it was reduced to 55.

Why 55? I suppose that is the age when the man has reached his peak work performance and after that it will just be downhill. But then why is it that the Govt. has increased the retiring age to 56. I suppose just to give the employee a chance to slide and then let them off.

What are he benefits of retirement? To some it is a time of rest. Many people I met (at least those who are still working) are looking forward to retirement. Why? To rest they say. I suppose they are right if they have got big profitable investments or draws a monthly/anual pension. But if you do not have a big profitable investment and do not draw a pension, be careful; you may have no money to live on after the day you retire. EPF? That is only in theory, you know what we are like when we have the money - we spend. If not we, its the wife. I have heard some wife mentioning, "I want his EPF money when he retires, if not all at least 30%". Now that is dangerous talks, dangerous to all parties - the husband and the wife. After you pay all your bills, debts and all other expenses you have incurred previously like credit cards expenses and advances taken (from Co. and from banks, or even loan sharks) you may just be left with 30% of that EPF money. Now what? Give that 30% leftover away?. Of course you still own the wife (or she owns you) luckily. But you now have no control.

To the employee? So to the employee, when he/she retires the umbilical cord is cut, and the Co. do not expect anymore from the employee. Of course the Co. may have the choice of re-employing the employee under contract, or even extend his/her services but such offers only are few and far in-between, it happened in very few cases, to those who are either very competent, one of the 'bosses' favourites or if the Co. cannot find a suitably qualified and experienced replacement. Or the employee may give its ex-employee certain advantages when any services/contract is sourced out, as had happened in some Co., some even have set such policies.

To the employer? Such relief to them, get rid of dead wood or employee with too many 'bright ideas' or even troublesome employee who the employer can hardly control even though the employee may have he brightest idea in the world - the idea may not be flowing in the same direction as the Co. culture. Promote new blood, better qualified and full of zest and ideas. Of course, as the saying goes, "New brooms sweep clean". First the new employee gets rid of the last employee paraphelia, products, procedures and sometimes even staff. Sometimes even the table and chairs orientation are changed or even the table and chair themselves, just to ensure that the new employee has 'ideas' and no more 'smell' of the old employee. It does not matter whether the ideas are beneficial to the Co. or not but at least the ideas are new. But human work output depends very much really on exposure to environment, soon the new employee will saturate of zest and ideas, and he/she will have a set ways and complacent sets in. Now will it be time for the employer to look for a 'new broom'?

Financial compensation on retirement? Normally its quite good. Gratuity and bonus and EPF. There is a lot of money to be received. But money is like water, it easily slips through your fingers easily. As I mentioned above, you will be lucky if you are left with 30% of the total after paying everything when you just retired. A study made by the Govt. Indicates that retirees will finish all their EPF money after 2 years. I can vouch for that. Unless of course the retirees live very prudently, and on assuming that on the day he/she retires he/she does not owe anyone money. But then again when you have a lot of money you have many 'relatives' who either want to borrow your money or who will entice you into business; that is the first danger. Business people are very shrewd and they can squeeze money from anyone, even their ow mother. Of course the businessman will tell the new retiree that the business will bring a lot of profit. and the retiree, being new to the game and who had always had his/her umbilical cord attached to their former employer can be gullible (and the businessman knows this) and start investing in the venture with the new found and smiling venture partner. Result? Loss of money and of course loss of face. Pull out? its too late, the money are either too tightly tied down or just dissolve away into thin air or like water in desert sand.

Readiness of employee to retire? Being human, most retiree may originally find that its difficult to say that they are ready for retirement. Most have led comfortable life while in service and others may have commitments, some truly and some over extended - such as children studying in private Colleges/Unis or even overseas. Its difficult to accept that on retirement they will receive nothing and having to live on savings. And to pull out their children from these private Colleges/Unis, its a loss of face to themselves, their family, their colleagues and to the children, and in addition a loss of face for the children. And to think of a new way of life, a life in prudence or having to find a new job to supplement the meagre sum they get from their last employer. And nobody wants old man on to a new job, they may be employed as a consultant say but with either unsure income or income far below what they used to get. Any having to go for interviews and all that - its quite scary especially to those who have been occupying high positions in their last job. And to adapt to a new culture of the new employer, its will be an uphill ask. And some times having to uproot the family merely to get the new job away from the place where one used to reside when one held the last job. But I observe that this is mostly happening in us Malaysian, I have seen Europeans who are pretty old and who are employed in foreign countries like Malaysia and yet are able to perform or adapt to new cultures, environment and shift places of residences. Is it just us Malaysian having this fear?

Taken back on Contract? True, as I mentioned above, some are taken back on Contract, some for 1 year and some for 2 years. Most of them in jobs that they are very familiar with. They probably have reached their uppermost level of competency, Peters principle have taken effect. And after that 1 or 2 years contract, they are again lost to the world. And their colleagues who retired earlier than them may now have reestablished themselves in their new jobs. Another cycle begins. But of course if they do not want to work anymore, assuming that they have enough profitable investments or on pension scheme or they have rich wives or parents or even children who can support them, then they can play golf all day.

Other employee's feelings when you are on Contract? Its a sad sad situation really. Some of those below them are happy and some quite cynical about it. I have heard good remarks and I have heard bad remarks. I will not mention them here. But most of them expect the Contract not to last that long as they expect to step into the Contract employee's shoes as soon as they can. And those left behind are also quite cynical sometimes to retirees who become Contractors or Consultants. Remarks like, "Telling us as if he does not realise that he has now retired" or "Under the new management, we operate the Department differently" have been heard in private. These are never mentioned openly, us Malaysian being that polite.

Jobs/activities after retirement? This is a difficult phase of a man's/women's life. In those days, it was always 'balik kampong'. Nowadays very few have kampong and mostly do not want to 'balik kampong'. City/Town life suits them better. In the kampong, friends/relatives have died or have migrated elsewhere, unlike in the old days where most people stay back in the kampong. And facilities in the kampong are not up to 'standard'. And the education/experience/belief system are different, especially with the current "I am more Islam than you" between UMNO and PAS. So most have sold off their inherited kampong properties and have stayed back in town/city. And some have married town/city bred lasses so no way will this lass move to the kampomg. What do they do in the city/town. Play golf, at least most of them. For the Muslims, they are young again, they will learn all the intricacies of Islam and will try to practice the religion as perfectly as they can. Sometimes they can be mistaken for a PAS member because of their deep commitment to Islam, though their political belief may be too far from PAS. And the results of 'stay back'? Grave yards in the town/city have a faster rate of occupation than those in the kampong.

Personally I thought when I retire I wanted to look after whatever inherited land I have in the kampong. I have been proven wrong. Its too expensive to maintain the land, weed grow faster than the fruit tree, fruit seasons are too far in-between, the weeds have to be cleared up often, I have no energy to clear up these weeds and I cannot get cheap labour to clear up the weed for me, and weed killers are too expensive and too environment unfriendly and endangers the weed killer sprayer. And return on investment is not there, all these are just hobby. I am not cut up to live in the kampong, I have lived in the town/city too long. Its a laugh to think that even my children will love to visit the kampong.

Finances after retirement? This is difficult. Very few have profitable investment. I know a few but even then these people still have to work, either to look after their investment or to earn their keeps when their investment is found inadequate. Remember that bills have to be paid, especially our retired habits of living in town/city. The exceptions being the pensioners, especially those with wife/wives who are also pensioners.

Credit management? Depending on status prior to retiring. With nil borrowings just before retiring, it is a happy ending. Otherwise you will be receiving many phone calls and AR letters.

Health care after retirement? In most cases your last employer will not take care of this. The only organisation that takes care of you and your spouse until death is LLN/TNB. How do they do it?. I do not know and I do not care, but the fact is that they do. They are in the know of the best mechanism. And no Insurance Co. will give you health insurance when you reach 60 years old, I do not know if they do after 40 as well. But some will still give you Hospitalisation Insurance prior to your 60th birthday, with very expensive premium accordingly. Even if you last employer organises the insurance scheme, the Insurance Co. will still refuse.

Abode? Family and children? Most retiree may have already own a house where they can retire to, and almost of these are all in town/city. And others may own a second house. And others may even have other houses or apartment for rent. Its very unfortunate if a retiree does not own a house or an apartment where he/she can retire to. And most have children past their school or Uni age, unless he/she marries late or has had a second marriage due to spouse's death or divorce. Again its unfortunate if a retiree still have school/Uni going children. Education is expensive.

Advice to those still in employment? I would say "Save". Control expenditure, be very careful on credit, especially those related to sign first and pay later scheme, like Credit Cards. Buy a house which you can use as investment; you may sell it later if you decide to settle at that location. Invest in saving schemes if you are sure that the scheme is not 'fly by night'. Avoid the Stock Market if you are not well versed in its operations. If you are sure then this is scheme that can make a lot of money. Take Health Insurance early so that the Insurance Company will still accept you and you may not pay too high premium later on when you are about to retire. And lastly I would say, "Have a Professional Qualification or a skill". This will tidy you up quite a bit in 'low' times.

How did the employer prepared us for retirement? Not many employer prepares you for retirement. PETRONAS for example does that. Most employer just give you a letter to inform you of your impending retirement and a check list as to what you have to do before you leave your position in the Company. After that you are on your own. Even the HRD cannot help you, the Dept. is staffed with people who has never retied so they do not know what to expect and cannot share their experience. They can only help you expedite your leaving the Company, and to explain to you in what is expected in the check list given to you. After that probably a farewell party, if you are lucky. And probably a gathering of retirees on occasions.

"Bersara" or "pencen". Provident Fund/Annuity (EPF) or a Pension scheme. Unfortunately for us in Malaysia, as far as I know, only the Govt. has a Pension scheme. Its unfortunate in that if we want to opt to that scheme we have to work with the Govt. And I have nothing against working for the Govt. but the choice becomes very limited. Which of the two schemes is more advantageous? Depends on what you want as the end results. In the pension scheme you get your money after you retire on a monthly basis, and when you die your wife may draw the pension. But I am not sure if the husband can get the wife pension if she dies first, assuming that she is also a pensioner. On the EPF scheme, you get a lump sum when you reach 55 years of age. This is a very tempting situation, you want to buy everything when you have the money in your hand. If you are unwise you may spend that money overnight, which as far as I know has not happened yet to anyone. And on top of that, sometimes the employer gives you a sort of gratuity lump sum payment when you retire, with certain conditions attached. All in all I think in all the cases the end result is almost identical ( I have not done any calculation really, its just my gut feeling). But the being in the pension is more secure, as you get your money every month even if you cannot work after your retirement and your spouse gets the money after your death. I think with that in mind the Govt. is thinking of changing the EPF Rules so that payments can be made monthly to retiree from the EPF fund. Legal? Yes, if the Govt. amends the EPF Act.

All in all, retirement is like death, you cannot avoid it. You may delay it, but at the discretion of the employer. How you prepare for it and what you do after you retire, its all in your hands. People may advise but when they do that its based on statistics and their own experience and expectations.

Happy retirement.
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