Did you know that only 7 percent of young Filipino professionals have a monthly savings plan? A local study states that Filipino millennials are investing rather ineffectually and are doing so only “when they feel like it.”
Time is going by quicker than you know. You don’t want to be that retiree who regrets that they didn’t save earlier for a pension.
Therefore, it’s important to not waste time planning your retirement fund while you’re still young. Building a pension fund ensures that you will live comfortably with financial protection.
What Is Retirement Planning?
Retirement planning means your financial situation are arranged and managed to prepare for life after you retire from work or stop earning profits. It entails assessing how much funds you need when you retire and how, through savings and investment, you will make that happen.
Tips to Plan for a Successful Retirement
Planning for retirement is a lengthy process. Take things one step at a time, ideally as soon as possible, to make sure that your savings will sustain your living expenses after retirement. Here are some tips to help you build a successful retirement plan:
Set and commit to your retirement goals
Planning for retirement includes taking severe life-changing choices. To do it right, start by setting specific, quantifiable, achievable, meaningful, and time-bound objectives.
Start saving as early as now
The best time for retirement savings is today. The more time you have until retirement to save funds, the longer it takes for your funds to precipitate and evolve.
Adjust your monthly budget to set aside an amount for your pension fund alone, no matter how low it may be. What matters is that you are taking action, continuously saving, and resisting the urge to spend your retirement funds.
Automate your savings
Automate savings by opening bank savings account for your retirement fund that deducts a set amount from your payroll account every month.
Find other ways to generate income
Find methods to boost your revenue if your budget does not really allow space for that. These could include taking sidelines and home-based part-time employment or setting up a small business.
Build an emergency fund
It’s also important to save up for emergencies! It really helps to have your living costs in a savings account or time deposit worth at least six months. This is so when an emergency arises, you will not be tempted to withdraw from your retirement fund.
Protect your finances through insurance
Safeguard your assets through insurance. This will protect your finances against catastrophes, accidents, and other unforeseen incidents. It may seem like an additional cost, but insurance can help stop the flushing out of your pension fund when something bad occurs to your assets or to yourself.
If you start young, be aggressive with your investments
If you start building your retirement fund at a young age, maximize it by investing a greater proportion of your assets in high-risk investments. Amid stock market ups and downs, the long-term horizon enables your investment to develop over time.
Consult with a licensed financial planner
You need expert advice and guidance from a licensed financial planner whose expertise, experience, and qualifications can assist you to make intelligent investment choices.
Review your retirement plan regularly
Building your retirement fund is an ongoing process. Funding college tuition for your kids should not prevent you from preparing for your pension financially. If you find it difficult to manage your finances, then make the needed changes, such as not sending kids to expensive schools.
Day-to-day expenses and major life events are mostly the priority of many Filipinos. Most of them think that saving for retirement is a daunting task and they normally prioritize short term comfort over investing for their future. But what they don’t realize is, a secured future with retirement savings is the best gift they can give themselves and their loved ones. So start saving now, no matter how small it is and we promise that your future self will be thanking you.