Cracking The Retirement Code: S.I.R.E


Whilst most people recognise the need to plan for their retirement, recent surveys showed that only about 20% think they have planned and adequately saved for their retirement, with the remaining 80% not ready to replace their earned income when retirement comes along.

The need to plan and save for retirement is not in question but the lack of action taken to address the gaps in providing for their retirement is the key issue. The most frequently cited excuses are “it’s still a long way before I retire”, “I’ll do it ‘tomorrow’” and “I don’t know how”. Whilst these seem to be convenient excuses, most agree that the lack of knowing what to do and how to do it, are perhaps the fundamental causes for not taking action.

You can start taking action these three steps:

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The winning formula

It is not too difficult to achieve your retirement dreams. PPA has formulated a simple process to guide you on how to start and manage your PRS account. The Save. Invest. Retire. Enjoy or S.I.R.E process will help you to make conscious decisions on how to start and manage your PRS accounts. Achieving your desired retirement goals does not just happen. It takes proper planning and commitment to make it happen.





Accumulating funds for retirement needs to be a disciplined and regular activity to achieve the desired retirement nest egg. Smart retirement planning suggests that we set aside additional 10% of our take-home pay for retirement.

We also need to be very clear on the purpose, that it is for retirement only and not for other purpose. At PPA, we strongly encourage members to do regular monthly contributions for PRS to make saving affordable and also to inculcate the habit of saving for retirement, whether you are starting young in your 20s or later in your 50s.

The longer the time horizon one saves for retirement, the more savings one will attain to replace your income at retirement. Regular contributions will help to “dollar cost average” your savings, a technique designed to reduce market risk through the systematic regular monthly contributions at pre-determined intervals and set amounts.


While saving is setting aside money, investing provides compounding growth. Money that is saved and invested has a potential to enjoy compound growth to ensure that the funds stay ahead of inflation and also be rewarded with an expected return.

When investing, people need to ask what their retirement objective is. Is it for pre-retirement accumulation capital growth (during the accumulation phase when we are gainfully employed) or retirement income generation (during the decumulation phase when we retire).

In addition, people will need to customise their retirement investment plan according to their age, lifestyle and financial circumstances. Before making an investment decision, you should consider the different types of risk that may affect you and learn to manage risks by way of diversification, management of the performance of your investment and knowing the choices that are available to you.


Retirement is not a destination but a long journey. During the 30 to 40 years pre-retirement phase, it is a crucial period for a person to accumulate adequate funds for retirement. But it does not stop there.

Retirement also means, during the golden years (also known as decumulation phase), one is able to manage his or her retirement savings in order to stretch a good 20 years as we live longer due to advancement of medical sciences.

The best way to do so is to keep your savings invested and make monthly withdrawal of a set amount that is enough to use as expenditure, as passive income. This is to ensure that your money continues to work hard for you while withdrawing a regular monthly retirement income.


Retirement should be the most exciting phase in our life but it requires one to have the income and financial security to make our retirement years a golden one. The end objective of retirement planning is to ensure that we enjoy the golden years with adequate, sufficient and sustainable income for your retirement. The only sure way to provide enjoyment for our retirement years is to sacrifice our immediate wants for our future consumption during the accumulating years.

Malaysians can now take control of their retirement by following PPA’s simple formula for a successful retirement – Save. Invest. Retire. Enjoy or in short S.I.R.E.

Use PPA’s retirement calculator to find out how much additional savings you need to make on top of your EPF.

For more questions on how PRS can help you address these retirement income issues, leave a comment below!

Dato’ Steve Ong is the chief executive officer of the Private Pension Administrator Malaysia (PPA). He is a seasoned professional with 30 years of experience in the financial services industry, with 21 years involvement with the life insurance business and nine years in the fund management industries. Prior to his move to PPA, he was the CEO of one of the country’s leading fund management companies, which he started and grown.

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