Have you given thought about retirement?
In all honesty, I have not given this topic a lot of thought. Why? because of two things
One, retirement brings up an image of an old couple with 20% discount on restaurants. Ironic because at that age, senior citizens do not eat a lot plus senior citizens have a lot of diet restrictions. Avoid oily foods. Avoid sweets. Avoid fast food. And those are exactly the kind of cuisine you will find at the restaurants.
Second, insurance sales agent!
C'mon, you are lucky if you have not encountered one yet. That kind of agent that will talk fast, scare the hell out of you by telling that you cannot support yourself when you reach the retirement age unless you buy his/her insurance. Old school scare tactics. Good thing it didn't work on me but until now, it stirs a deep emotion of anger whenever i recall that incident.
However, retirement is a reality that we will all face and now is the perfect time to set aside some time and plan about it.
These are the questions a certified financial planner asked in one of the sessions I attended.
Planning for retirement is difficult especially if that is years away from now. We have this tendency to live for the moment so to think about the future is a difficult task.
To make that easy, look at your standard of living right now. How much do you spend every month? If you do not have an idea then you should start tracking your expenses. It is a must that you now how much you spend. Knowing that should give you an idea how much you will need in the future.
If you are spending P50,000 a month then you will need the same amount plus the general increase in prices of commodities.
The Price of A Soda
To make the illustration easier, how much does a bottle of Coke costs when you are still a kid? Php 1 or Php 2. How much does it cost today? Php 7
See... If today you drink a bottle of Coke everyday and want to do the same thing in your retirement, then you need to save Php 7 plus the projected price increase in coke by the time you will retire)
Of course, you are not limited with your current lifestyle. If you dream of a better living conditions when you retire then do so. Dream about it. Write it down and add additional amount to the money you will need in the future.
Answers to these questions will help you plan accordingly. If you are 32 like me and plan to retire at 60, then we have about 28 years to prepare to save the amount for our retirement. If I think I will die at age 88 (60 + 28) and plans to have the same standard of living I have now, then i have 28 years from today to save while spending for my day to day expenses.
To make things simpler, if today I spend Php7 for my soda then I should discipline myself to save Php7 and put it in an investment that will enable me to purchase a bottle of Coke by that time I reach age 61 until age 88.
Is this doable?
I guess so. I will be the first to admit that reading concepts and learnings which I share here in my blog does not make me an expert. However, we should know that retirement is real and it is something we should not ignore.
While I have an account which I designate as a retirement account, I have yet to set a specific goal on it. How much the account should grow? How much should I put in regularly? I am just saving for the sake of saving.
How about you? Have you done anything about retirement?
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| via Ota_Photos |
In all honesty, I have not given this topic a lot of thought. Why? because of two things
One, retirement brings up an image of an old couple with 20% discount on restaurants. Ironic because at that age, senior citizens do not eat a lot plus senior citizens have a lot of diet restrictions. Avoid oily foods. Avoid sweets. Avoid fast food. And those are exactly the kind of cuisine you will find at the restaurants.
Second, insurance sales agent!
C'mon, you are lucky if you have not encountered one yet. That kind of agent that will talk fast, scare the hell out of you by telling that you cannot support yourself when you reach the retirement age unless you buy his/her insurance. Old school scare tactics. Good thing it didn't work on me but until now, it stirs a deep emotion of anger whenever i recall that incident.
However, retirement is a reality that we will all face and now is the perfect time to set aside some time and plan about it.
THREE QUESTIONS TO ASK YOURSELF ABOUT RETIREMENT
- What is your age?
- When do you plan to retire?
- How much are you spending today?
These are the questions a certified financial planner asked in one of the sessions I attended.
How much are you spending today?
Planning for retirement is difficult especially if that is years away from now. We have this tendency to live for the moment so to think about the future is a difficult task.
To make that easy, look at your standard of living right now. How much do you spend every month? If you do not have an idea then you should start tracking your expenses. It is a must that you now how much you spend. Knowing that should give you an idea how much you will need in the future.
If you are spending P50,000 a month then you will need the same amount plus the general increase in prices of commodities.
The Price of A Soda
To make the illustration easier, how much does a bottle of Coke costs when you are still a kid? Php 1 or Php 2. How much does it cost today? Php 7
See... If today you drink a bottle of Coke everyday and want to do the same thing in your retirement, then you need to save Php 7 plus the projected price increase in coke by the time you will retire)
Of course, you are not limited with your current lifestyle. If you dream of a better living conditions when you retire then do so. Dream about it. Write it down and add additional amount to the money you will need in the future.
What is your age and When do you plan to retire?
Answers to these questions will help you plan accordingly. If you are 32 like me and plan to retire at 60, then we have about 28 years to prepare to save the amount for our retirement. If I think I will die at age 88 (60 + 28) and plans to have the same standard of living I have now, then i have 28 years from today to save while spending for my day to day expenses.
To make things simpler, if today I spend Php7 for my soda then I should discipline myself to save Php7 and put it in an investment that will enable me to purchase a bottle of Coke by that time I reach age 61 until age 88.
Is this doable?
I guess so. I will be the first to admit that reading concepts and learnings which I share here in my blog does not make me an expert. However, we should know that retirement is real and it is something we should not ignore.
While I have an account which I designate as a retirement account, I have yet to set a specific goal on it. How much the account should grow? How much should I put in regularly? I am just saving for the sake of saving.
How about you? Have you done anything about retirement?
