May 7


In Your 40s with No Savings? How to Catch Up to a Comfortable Retirement

The truth is, if you're in your 40s, this is kind of your last window for a relatively easy time to plan for a cushy, comfortable, anticipation-worthy retirement.

Not saying you can't pull it off if you start even later, e.g. in your 50s...

But imagine having less than 10 years to raise money that's supposed to last you at least 25 years. 😨 Stressful, right?

Needless to say, it is going to be increasingly difficult if you wait further. Not to mention you're also more likely to go through a lousy retirement lifestyle the later you start planning for it.

There really is no better time to start than now!

So, here are 8 steps that will help you, even if you have no personal savings for retirement yet:

1. Review Your Net Worth

Without tackling this first step, the rest of the work would be a directionless guessing game.

When it comes to planning your finances... the higher the stakes, the more accurate you want your numbers to be.

Since you now have less room for error, doing this step properly is of utmost importance.

Take stock of ALL your assets and liabilities.

(Or, in plain language, figure out how much you own and owe.)

Your assets are your property, car, investments, collectibles and etc. Anything that you own that has monetary value.

Write down the value of everything as if you were to sell them today.

On the other hand, liabilities are your mortgages, loans and debts.

To quickly work out all your assets and liabilities, you can use my one-page template below:

(It works digitally on your phone, as well as printed)


If your number is healthy, i.e. your net worth is a positive number - congrats! You're off to a great start!

If your number is a negative figure - no time to beat yourself up about your past choices...

Let's move right on because we've got some important work to do!

2. Figure Out How Much You Need to Retire

Now that you see clearly where your starting line is (your current net worth), it's time to figure out your finish line.

Let's find out exactly how much money you need to retire.

Use this retirement calculator below to do that. Test out a few different scenarios to see how the numbers change.

e.g. retire early, retire a little later, what if you live until 65, 85 or 100 (and join a bunch of other 100-year-olds in a Japanese village), what if you get low or high investment return, etc.

Retirement Calculator

It helps a little if you have a certain amount of money in compulsory savings already, such as in EPF, which you can input into the calculator above.

After finding out your goal number, the TOTAL stated on the RESULTS page is the gap you need to save up and invest for!

The next step will help you out big time with this new ultimate goal of yours 😀

3. Cut Back Where You Can

This step benefits both negative-net-worth people and positive-net-worth people.

And it is this always helpful exercise - Reflect on your current lifestyle and ask yourself where you (and your family) can improve upon spending habits.

Can you cut anything back to make room for your retirement goals?

Oftentimes, we get stuck in the fixed ways we spend money that simply feel comfortable...

And lose sight of easy alternatives that aren't even necessarily a sacrifice or "downgrade" to our lifestyle.

For instance, sometimes it's as easy as opening up your telco mobile app to downsize a mobile plan because you've never needed the unlimited calls.

Cutting Back When Family Is Involved

Generally, it's easier to decide what expenses to cut back on when all you need to control is just yourself.

Unlike when it involves a spouse and kids, things can become tricky very quickly. But nothing that can't be solved with a little creativity and an open mind!

For example, instead of getting overpriced dinners from cafes so often, involving your kid to cook a wholesome meal at home can be every bit as enjoyable (and a lot more memorable and fun for the little one!)

Or, if your kid only enjoys a particular brand of expensive granola or imported yoghurt?

Bankrate has a tip for using a blind taste test to demonstrate to your child that cheaper brands and name brands are often similar.

Last example, family vacations can be the same amount of fun when taken in either Malacca or Taipei. At the end of the day, you know it's the company that counts!

I can shove out a dozen more examples but you get where I'm going...

Think of some easy changes that you can make to shave off some money for savings.

Because, at this point, every bit counts towards the end goal.

Whenever you waver, just remember, failing to save money now is NOT worth dumping the 3x to 4x enjoyment (in the future) for!

4. Dump Your Debts

Right now, very likely you're carrying some sort of debt to support your current lifestyle.

A housing loan or two, maybe a car loan that's in its final years, and maybe (hopefully not) some credit card debt or a personal loan for reasons you'd rather not talk about.

Whatever your reason was, you should now focus on eliminating these suckers one by one to prepare for a debt-free retirement.

Two Brilliant Ways to Clear Debts

Start off by listing down all your debts. Printable available here. You can either print it or fill in the blanks in the pdf electronically.

Then, there are two strategies for clearing debts that I would recommend.

Both strategies require you to make the minimum payments on all debts while making an extra effort to pay off one, specific, highest-priority debt.

Extra effort meaning additional payment.

The first strategy is to prioritise clearing the debt that charges the highest interest.

In simpler term, clear the biggest bloodsucker first. If you rank them by interest from high to low, an example for a Mr Imaginary Tan could look like this:



Interest Rate

Outstanding Balance

Payment Due Date


PB Platinum Card



Every 20th


Maybank Personal Loan



Every 25th


CIMB Flexi Loan (for housing)



Every 30th


Car loan



Every 21st





Every 1st

In Malaysia, debts typically rank this way from highest to lowest interest:

  • 1
    Credit card debt
  • 2
    Personal loan
  • 3
    Housing loan
  • 4
    Car loan
  • 5
    Education loan

The second strategy is the Debt Snowball Method made famous by Dave Ramsey.

With this method, you pay off the smallest debt first, regardless of the interest rate.

The reason why a lot of people prefer this Snowball method?

Once you pay off the easiest-one-to-clear, say, a RM2,500 credit card debt (let's say you have four debts in total), the psychological effect of "one down, only three to go" acts as a motivation boost for you to keep on keeping on.

If you're asking, "What's so bad about bringing debts into retirement?"

Number one, you are likely to have reduced or no income at all after you retire.

Number two, even if you choose to continue to make money via a part-time gig or a small business as a silver fox, you want to have the option to quit or stop anytime you please. For health reasons, for travel, or even for after realising you hate the gig/small business!

If, currently, you're only left with relatively low-interest debts, e.g. housing loans, nice job!

Your priority now should be to pay off your mortgages prematurely to enjoy the hefty interest savings.

And for the peace of mind that the asset is now 100% yours.

Another benefit of paying off all your debts before you retire (if you can, do it way before you retire) is so that you can funnel all the additional monthly savings into investments.

When that happens, you'll be able to make SUCH big impact on your total savings every month because you will have that much more money to invest with.

Next, speaking of investments that can prepare you for a shining retirement...

5. Review Your Investments

Remember how much you loved the roller coaster rides at the amusement park when you were younger??

Now the flips and turns can be just a little too much for the stomach...

Yes, you may still get on a couple rides for special parks like Disneylands, but unlike in the past, the first row no longer appeals to you the way it used to...

Your risk tolerance for investment kind of evolves the same way!

As we age, we typically grow more risk-averse. Meaning we don't like to tolerate as much risk anymore.

Taking a back seat from electrifying, heart-palpitating, sweat-inducing money decisions is a sign of a wiser and steadier version of yourself.

And these changes should reflect accordingly in your investment portfolio!

If it has been some time since you last analysed your risk tolerance, head on over here for a quick quiz to find out.

Understanding Your Risk Appetite Before Charging Ahead to Invest

Learn about your own risk appetite before you charge ahead to invest or to adjust your investments

Done? Awesome! The next step is crucial in helping you catch up with your retirement.

Knowing what your appetite for investment looks like now, evaluate each one of your investments and make necessary adjustments.

The goal is to match your investment portfolio to your current risk tolerance.

Repeat this at least every two years (preferably, do it every year).

Because, at any point of time in your life, you shouldn't be holding higher risks than what you and your family can bear.

6. Double down on increasing your income

If you truly can't squeeze any more savings out of your income, your alternative is to... increase your income!

A pay raise, a side hustle, monetising your hobby, skills or current assets. Pick your way of fattening the dough you bring home.

And, remember, make that surplus go into your investment fund, not a shopping spree!

Increase Your Income to Hit Your Retirement Goals

Find a way to increase your income to start building your retirement fund. Your decision now will pay off in time.

Ways to Increase Your Income

There are countless ways to bring in more money.

If you work for a company, it may be time to ask for that pay raise if you believe you're bringing more value to the table than what you're being compensated for.

There are thoughtfully written practical advice out there that you can incorporate as you go about asking for a raise.

It can also be helpful to find out how Malaysian bosses & CEOs think you should approach an ask for a pay raise.

A mega list of 25 ways to make side income in Malaysia

If a pay raise is not possible right now, get 25 side income ideas for Malaysians here.

Work under an evil boss or in a toxic workplace? Or for whatever reason a pay raise at this point is not possible in your situation:

Check out my most popular post, with 25 side income ideas for Malaysians, complete with a bonus material to help you find out what side income project you can start today.

Invest your additional income towards your retirement plan

Even a RM1k extra savings per month from a side hustle, compiled over 20 years with 6% yearly interest will hike your net worth up by close to half a million.

RM441,427 to be exact.

A sizable amount that will obviously improve your retirement lifestyle or, at the very least, help you not delay your retirement.

7. Looking to pay for your children's education? Have a plan for that cost

Education costs increase 8% year after year.

If you have a 10-year-old, what costs RM150,000 now will cost RM277,000 when the kid is 18.

Almost double of the current cost. Pretty scary, I know!

Which is why, your money needs to be making money while you're saving up for your child's education (similar to how you need to save and invest for your retirement).

Save and invest for your child's education in advance

You can save your way to your child's education fund, Ringgit by Ringgit, but the process will be much easier if you invest those savings along the way.

It may seem daunting to figure this all out, but let me break it down into four steps for you.

  1. 1
    Calculate how much your child's higher education will cost
  2. 2
    Calculate how much needs to be saved and invested per month
  3. 3
    Build an investment portfolio for this purpose
  4. 4
    Keep track / monitor the progress of the savings and investments

While you're saving up for this goal and putting the money away for a medium to long term, make sure this money can hedge against inflation.

Invest the money somewhere that generates interest higher than the inflation rate (hence, obviously not in FD).

Start doing this early on so that you don't have to choose between your own retirement and setting your kids up for success. Save yourself that painful dilemma!

We see it everywhere and all the time, if there's only enough money for either a kid's education or a parent's retirement fund, most parents (especially we Asians) will choose to spend their last dime on the education.

When in fact, not prioritising retirement can bring detrimental long-term consequences to your life as well as your children's.

Would you choose your own retirement or your children's education

Would you choose your child's education fund over your own retirement, or vice versa?

I found this very interesting and honest article not long ago:-

A young Asian woman with parents and in-laws who failed in retirement planning wrote this think piece that may further convince you.

If your kids need to go away for higher education in a couple years and you're not quite ready, consider consulting a Certified Financial Planner to look at your total financial picture and map out a solution together.

8. Have Good Insurances in Place

Not the sexiest word in the world, but a stone that has to be turned by all responsible adults.

Unless you're confident about your current bulletproof diet and exercise regimens to maintain your health till old age, chances are you will benefit from having somebody pay for your hospital stays and potentially crazy expensive treatments.

A small operation may cost up to RM10k today, the big ones anywhere from RM10k to RM120k.

As we age and our health deteriorates, not having insurance payouts to cover these medical expenses can easily jeopardise our retirement savings.

What's the least minimum you need to get?

If you're stumped by the overflowing insurance products available out there...

(Did you know? There are at least 600 insurance products in our Malaysian market.)

And you're wondering "What are the essential ones that I need?", I'll save you some time and give you these straight answers:

As an individual in your 40's, the one insurance you must have is a medical card.

Other optional extras include critical illness plan, personal accident insurance, life insurance and the list goes on.

Whether you need the optional extras depends on your health condition, your family's medical history, your lifestyle, your occupation, whether you need a debt cancellation solution and so on.

What's a debt cancellation solution?

In essence, getting a debt cancellation solution means having an insurance company pay off any of your mortgages or loans upon your death or if you face permanent disability.

Why would you pay an insurance fee to take care of this? So that the burden of paying off those debts will not fall on your loved one's shoulders. The insurance company will pay off the debts on your behalf.

If your insurances are all over the place, i.e. not updated, you're not even sure what you have, or you haven't got the essential ones, my humble and earnest advice is to...

Skip the traditional insurance agents to save time, and find a Certified Financial Planner who has expertise to professionally compare, and has the access to get you any insurance from ALL insurance providers in Malaysia.

Because having good insurances in place is crucial for getting ready for retirement.

You need them sorted out yesterday and you'll save a lot of time and money with a professional.


In a nutshell, 40's is the high time to kick-start your retirement prep if you haven't begun already.

The key lies in

  • saving more,
  • investing well,
  • adjusting your investment risks to match your current risk tolerance,
  • finding big wins in earnings and savings,
  • and avoiding/being ready for big expenses.

Take your retirement goals seriously and don't become a statistic.

You know, the ones in the news that keep saying most Malaysians can't retire with enough money...

With the right investment management skills and a little bit of budge-proof persistence to see through the process of achieving your final required amount, I'm telling you, you can do this!

p.s. Comment below and let me know: What is your ideal retirement age?

You may also like

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Leveling up your personal finance knowledge is going to make you the most money in 2024. Period!

Sign up to get made-for-Malaysians resources in your inbox.