Pattrick Ng - Life Planning Advisor

Who doesn't get taxed ?

Afraid of paying too much taxes ?
Check & review ya !

[Personal Tax Reliefs Year 2022]

Attention to taxpayers!

It is nearly the end of the year now.

Are you ready to file your individual tax for this year?
Do you know what you can claim as tax reliefs?
Are you sure that you have maximized your available claims to get the best tax savings?

Well, it is never too late to find out.

Do check out the slide below to understand more! You can use this as a guide to get an idea on how to plan your taxes well.

Feel free to contact us if you have any questions.

Email: [email protected]

𝐈 𝐚𝐦 𝐧𝐨𝐭 𝐰𝐞𝐚𝐥𝐭𝐡𝐲, 𝐬𝐡𝐨𝐮𝐥𝐝 𝐈 𝐰𝐫𝐢𝐭𝐞 𝐚 𝐰𝐢𝐥𝐥 ?

In short, YES !

Reasons being :
1️⃣It maintains harmony in your family
Your intention and your wishes are written down clearly in black and white, no assumptions and no arguments

2️⃣It saves time, money + hassle
It takes about 6 months to 3 years to process a will from start to finish. It will take anything from 2 years to 10 years if there is no will. Your choice !

3️⃣You can name your children's guardian
Choose who to take care of your children if both husband and wife is not around. You want the best for your children, isn't it ?

Reminder, if you have an asset, be it a car, a house or an investment account, then you should have a will. There are so many benefits to get this done soonest possible !

Contact your CFP certified financial professional for more advice. 🦸‍♂️

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𝗗𝗲𝗳𝗲𝗻𝗱𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝗼𝘄𝗻 𝘀𝗮𝘃𝗶𝗻𝗴𝘀 𝗳𝗿𝗼𝗺 𝘆𝗼𝘂𝗿 𝗯𝗶𝗴𝗴𝗲𝘀𝘁 𝗲𝗻𝗲𝗺𝘆

Since young, we are being taught about the benefits of saving up. We are also aware of the importance of saving up ever since we received our pocket money during primary school. If we continued the habit, everyone should have a sizable amount of money in their bank accounts now. However, many are left with empty / near to empty bank accounts currently, what happened ?

Simple, we used up all the money.

Saving up is a lengthy and boring process, but using money is always fun and exciting !
Money in your bank account is like toothpaste, once you pressed it out, it never goes back in, isn't it so ?

It is normal to find that most Malaysians, upon retirement, can only find money in their EPF and insurance policies, but not in their savings account.

The reason is, there are 2 key mechanisms in EPF and insurance policies that ensure money is being saved effectively :
1️⃣Forced regular savings
2️⃣Cannot withdraw until a certain age

If you are someone who cannot really save up, I highly recommend that you find out more about the benefits of forced savings and how to utilize the different financial tools on the market for this purpose. If all thing fails, do speak to a CFP Certified Financial professional for better advice. 🦸‍♂️

Remember, the biggest enemy for your savings is you yourself ! 👻

𝗜𝘀 𝘆𝗼𝘂𝗿 𝗘𝗣𝗙 𝘀𝗮𝘃𝗶𝗻𝗴𝘀 𝗲𝗻𝗼𝘂𝗴𝗵 𝗳𝗼𝗿 𝘆𝗼𝘂𝗿 𝗿𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 ?

Before we go further, let's see some news headlines:

"While EPF is vital, elderly need more than money" -- NST, 18 Oct 2021
"Only 3% of Malaysians can afford to retire, says EPF" -- Bernama, 31 Oct 2021
"Look beyond EPF for retirement" -- TheStar, 27 Jan 2022

Just by looking at these headlines, we can almost conclude, one should not depend solely on monies in their EPF account for retirement.

Instead of looking additional avenues for retirement savings, we need to first ask ourselves, "How much should I have to retire comfortably?"

According to this website, a typical Malaysian male age 35 today, will require at least RM2.4mil to retire comfortably at age 60.
https://www.greateasternlife.com/my/en/personal-insurance/understand-insurance/financial-tools-to-know-what-you-need/retirement.html

1️⃣Will your EPF have at least RM2.4mil when you reach age 60 ?
2️⃣If not, what can you do about it ?
3️⃣What are your options ?

The answers are readily available online on many websites, but if you feel that you need better advice, do speak to your CFP certified financial professional. 🦸‍♂️

𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 : 𝐈𝐧𝐜𝐨𝐦𝐞 𝐨𝐫 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧 ?

Before we invest, it is important that we determine our investment objectives. One of the most important investment objective is: 𝐝𝐨 𝐲𝐨𝐮 𝐰𝐚𝐧𝐭 𝐲𝐨𝐮𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐭𝐨 𝐠𝐞𝐧𝐞𝐫𝐚𝐭𝐞 𝐫𝐞𝐠𝐮𝐥𝐚𝐫 𝐢𝐧𝐜𝐨𝐦𝐞 𝐨𝐫 𝐠𝐞𝐧𝐞𝐫𝐚𝐭𝐞 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐠𝐚𝐢𝐧 ?

Before we go further, let's see what are the difference between these two.

𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐈𝐧𝐜𝐨𝐦𝐞 is usually profit from interest payments and / or dividends. It can also be rental collected or royalty that are payable to you on a regular basis. E.g: Rental received every month after deducting expenses & mortgage.

𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐠𝐚𝐢𝐧 is the profit earned when an investment is sold for more than its purchase price. E.g: buying a piece of land at RM100 per sqft and selling it at RM150 per sqft after 3 years.

As a general rule of thumb, your investment objective will be to generate income if you are nearing retirement or already retired. If you are someone with active income or nowhere near retirement, capital gain might be your primary investment objective.

Some investments could provide both income and capital gain, such as stocks, unit trust, real estate and even insurance plans. Similar to most of the things in life, there are no hard and fast sure-win rules for investments. Do your own research, speak to your financial planner and start investing soonest possible. It is common for many to have many trial and error attempts before they find their most comfortable investment strategies.

𝐒𝐨, 𝐝𝐨 𝐬𝐭𝐚𝐫𝐭 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐧𝐨𝐰 !

𝗜 𝗱𝗼𝗻'𝘁 𝗻𝗲𝗲𝗱 𝘁𝗵𝗲 𝗥𝗠𝟭𝟬,𝟬𝟬𝟬, 𝘀𝗵𝗮𝗹𝗹 𝗜 𝘄𝗶𝘁𝗵𝗱𝗿𝗮𝘄 𝗮𝗻𝘆𝘄𝗮𝘆 ?

Instead of asking this question, maybe we should be asking, what can I do to maximize the RM10,000 instead of just keeping the money in EPF ?

Interestingly, there are a few things you could actually consider doing :
𝟭.) 𝗥𝗲𝗱𝘂𝗰𝗲 𝗗𝗲𝗯𝘁𝘀
𝟮.) 𝗥𝗲𝗱𝘂𝗰𝗲 𝗧𝗮𝘅
𝟯.) 𝗜𝗻𝘃𝗲𝘀𝘁

𝗥𝗲𝗱𝘂𝗰𝗲 𝗱𝗲𝗯𝘁𝘀 𝘄𝗶𝘁𝗵 𝗵𝗶𝗴𝗵 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁 (𝗽𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗹𝗼𝗮𝗻 / 𝗰𝗿𝗲𝗱𝗶𝘁 𝗰𝗮𝗿𝗱 𝗹𝗼𝗮𝗻 𝗲𝘁𝗰)
Remember, compounding interest works both ways. Debts compound as well. So it could make sense to clear off some debt if your debts are compounding at 15% - 20% p.a.

𝗥𝗲𝗱𝘂𝗰𝗲 𝗜𝗻𝗰𝗼𝗺𝗲 𝗧𝗮𝘅 𝗟𝗲𝗴𝗮𝗹𝗹𝘆 𝗯𝘆 𝗺𝗮𝘅𝗶𝗺𝗶𝘇𝗶𝗻𝗴 𝘁𝗮𝘅 𝗿𝗲𝗹𝗶𝗲𝗳 𝗯𝘆:
Buying life insurance (RM3,000 Tax Relief) or buying Medical / Critical Illness Insurance (RM3,000) or by investing in PRS (RM3,000 Tax Relief)
If your tax bracket is at 20%, just by putting money in any of the above, you are literally "earning" 20%. Furthermore, your money is still working hard for you and there are investment returns / insurance benefits that comes with it.

𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝗶𝗻 𝘁𝗵𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝘃𝗲𝗵𝗶𝗰𝗹𝗲𝘀 𝘁𝗵𝗮𝘁 𝗰𝗼𝘂𝗹𝗱 𝗽𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗽𝗿𝗼𝘃𝗶𝗱𝗲 𝗵𝗶𝗴𝗵𝗲𝗿 𝗥𝗢𝗜
This is simple math. Invest in a vehicle that can bring you a return of 8% - 10% p.a. Comparing the estimated average return of 4% - 6% by EPF, it will be big difference after many years. Of course, one have to bare the investment risk and also be discipline to not utilize the money before retirement to achieve maximum benefits !

Just my two cents, what would you do ? Please comment.

Was glad to be invited to share to the millennials of UTAR on the topic of "𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 ! 𝗛𝗼𝘄 𝘁𝗼 𝗽𝗿𝗼𝘁𝗲𝗰𝘁 𝘆𝗼𝘂𝗿 𝘄𝗲𝗮𝗹𝘁𝗵 !"

I had a great time sharing with great interaction from the participants!
I do hope you all learnt a thing or two that could help you greatly in your future endeavor !

𝓗ᴏᴡ 𝓜ᴜᴄʜ 𝓛ɪꜰᴇ 𝓘ɴ𝓼ᴜʀᴀɴᴄᴇ 𝓨ᴏᴜ 𝓝ᴇᴇᴅ?
The first step to buying life insurance is by determining how much you will need. A life insurance purchase must be part of a larger financial plan. A financial planner is extremely useful in this situation as they can help you see gaps and strengths in your current and future financial situation.

𝓒ᴀʟᴄᴜʟᴀᴛɪɴɢ 𝓗ᴏᴡ 𝓜ᴜᴄʜ 𝓛ɪꜰᴇ 𝓘ɴ𝓼ᴜʀᴀɴᴄᴇ 𝓨ᴏᴜ 𝓝ᴇᴇᴅ
𝐓𝐡𝐞 𝐃𝐈𝐌𝐄 𝐌𝐞𝐭𝐡𝐨𝐝
The DIME method is a common approach to calculating how large a life insurance death benefit should be. It involves four key factors :

Debt: How much debt would you leave to your loved ones ? This include credit card debts and student loans that will be passed down after your death.

Income: Multiply your income by the number of years you want to provide income replacement for your dependents such as parents, spouse or children. E.g: Calculate using the number of years until your youngest child turns 24 (after university studies)

Mortgage: Add in your mortgage balance (include hire purchase balance, if needed)

Education: Add an amount that covers tuition fees and living expenses for each of your children who will go to universities.

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𝓐 ʙɪᴛ ᴛᴏᴏ ᴅɪꜰꜰɪᴄᴜʟᴛ ꜰᴏʀ ʏᴏᴜ ? 𝓝ᴏ ᴡᴏʀʀɪᴇ𝓼, ᴀ ɢᴏᴏᴅ ᴀᴘᴘʀᴏᴀᴄʜ ᴛᴏ ᴛʜɪ𝓼 ᴡɪʟʟ ʙᴇ ᴛʜᴇ 𝓼ᴛʀᴀɪɢʜᴛꜰᴏʀᴡᴀʀᴅ ᴍᴇᴛʜᴏᴅ ʙᴇʟᴏᴡ:

Multiply Your Income by 10 Or by 5 Or by 17. This rule of thumb is hard to pin down. We’ve seen many numbers attached to it. And it likely won’t help you pin down an appropriate amount of life insurance. Better to look at your total needs and subtract the assets your family could use if you passed away.

Iꜰ ᴄᴀʟᴄᴜʟᴀᴛɪɴɢ ᴛʜᴇ ᴀᴍᴏᴜɴᴛ ᴏꜰ ʟɪꜰᴇ ɪɴsᴜʀᴀɴᴄᴇ ɪs sᴛɪʟʟ ᴀ ʙɪᴛ ᴄᴏɴꜰᴜsɪɴɢ ꜰᴏʀ ʏᴏᴜ, ʏᴏᴜ ᴍɪɢʜᴛ ᴡᴀɴᴛ ᴛᴏ sᴘᴇᴀᴋ ᴛᴏ ʏᴏᴜʀ ꜰɪɴᴀɴᴄɪᴀʟ ᴘʟᴀɴɴᴇʀ. Bᴇᴛᴛᴇʀ sᴀꜰᴇ ᴛʜᴀɴ sᴏʀʀʏ.

Whatsapp me @018-2136623

𝐄̳𝐦̳𝐞̳𝐫̳𝐠̳𝐞̳𝐧̳𝐜̳𝐲̳ ̳𝐅̳𝐮̳𝐧̳𝐝̳

An emergency fund is a separate account to cover an unforeseen situation. This fund is only to be used to overcome emergency only.
It shouldn’t be part of a long-term savings plan for tertiary education, a new car, a vacation or your retirement fund.

𝙃̳𝙤̳𝙬̳ ̳𝙢̳𝙪̳𝙘̳𝙝̳ ̳𝙨̳𝙝̳𝙤̳𝙪̳𝙡̳𝙙̳ ̳𝙮̳𝙤̳𝙪̳ ̳𝙨̳𝙖̳𝙫̳𝙚̳?̳

The rule of thumb is, at least three to six months’ worth of expenses.
You may also want to adjust the amount based on your obligations, family needs, job stability, or other factors.

𝙒̳𝙝̳𝙚̳𝙧̳𝙚̳ ̳𝙨̳𝙝̳𝙤̳𝙪̳𝙡̳𝙙̳ ̳𝙮̳𝙤̳𝙪̳ ̳𝙥̳𝙪̳𝙩̳ ̳𝙩̳𝙝̳𝙚̳ ̳𝙢̳𝙤̳𝙣̳𝙚̳𝙮̳?̳

It is highly recommended to place your emergency savings in an account that can be accessed easily without penalties. Normal bank savings account and fixed deposit accounts are the most common options.

Tɪᴘs: Dᴇᴘᴇɴᴅɪɴɢ ᴏɴ ᴄɪʀᴄᴜᴍsᴛᴀɴᴄᴇs, ᴏɴᴇ ᴍɪɢʜᴛ ᴇᴠᴇɴ ᴄᴏɴsɪᴅᴇʀ ᴜɴɪᴛ ᴛʀᴜsᴛ, sᴛᴏᴄᴋs, & ᴇ-Wᴀʟʟᴇᴛ ᴀᴄᴄᴏᴜɴᴛs ᴛᴏ ᴀᴄʜɪᴇᴠᴇ sɪᴍɪʟᴀʀ ᴏʀ ʙᴇᴛᴛᴇʀ ʀᴇsᴜʟᴛs. Pʟᴇᴀsᴇ ᴄᴏɴsᴜʟᴛ ʏᴏᴜʀ ꜰɪɴᴀɴᴄɪᴀʟ ᴘʟᴀɴɴᴇʀ ꜰᴏʀ ʙᴇᴛᴛᴇʀ ᴀᴅᴠɪᴄᴇ.