RETIREMENT PLANNING. ARE YOU READY?

Retirement just like memorials is one of the topics that we tend to shy away from. For some in the younger age bracket, it’s not a cause of concern since they still have plenty of time. For the middle age group, they are still busy raising the kids and providing for the family. For the nearing retirement age, it’s too late to start now.

So how and when do we start preparing for retirement?  What does retirement really entail?

Retirement is when you stop working actively because of age or preference.  It means you will still be having the same lifestyle you picked for yourself and be able to support yourself through it. You should be able to provide for your medical and wellness needs, travel and vacation plus all other expenses related to the inevitable or your demise.

These are all the ideal scenarios of what a good retirement plan is. But what is the real scenario?

When I asked my participants at  Pera Eskwela of  Bantay OCW if they’re planning for retirement , most answered yes. But hey check this out; their retirement plan is relying mostly on SSS and GSIS pensions.  Do you think your government pension plan can really give you the lifestyle you envisioned for your retirement years?  How about OFWs whose companies abroad do not really have a retirement plan for them?  A single illness or worst, death can easily wipe out everything you have worked for.  Other retirement plans include relying on kids as their investments in the hope they’ll take care of them come old age; and relying on the windfall of retirement money which by the time of receipt has lost most of the investing power it possess.

  

When do you start?

 Retirement planning should start the moment we are actively earning an income (meaning early on!) A portion should be set aside for every income received, and invested.   Investment risks should be carefully factored in depending on age when you’ll start investing.  If you start early, you can still afford to take high risk equity/ stocks investing since you still have lots of time to recover if you fail.  The upside is when you hit it big; your retirement may come in early.  The middle age group can still do high risk investing but more on a mix with traditional or medium risk investments (go for balanced funds). For those retiring within 5 to 10 years, it is not advisable to go heavily into equity fund investing as time is not really on your favor by now.  It is still recommended to do medium to low risk investing like RTBs. You can however start a business now (in your area of expertise of course!), giving time to gain foothold when you can do it full time upon retirement.

Learn more about money and retirement planning.  There are ways to bring this investment awareness and practice to your knowledge level and comprehension. It’s not much of a hard work learning about your money rather than finding yourself with nothing to work on at all.

Pera Eskwela is a public service seminar (FREE!) given by Bantay OCW is the hope of pushing up awareness on personal finance.  Check out this blog regularly for schedules. Email the author at josaonair@gmail.com.