There are over 12 million OFW in the world. As Filipinos are family oriented people, coming home is always be a plan after working for decades. Being taking care of their love ones will be the always best experience in there lives and they finally see retirement on the horizon. But now is not the time to coast. If you propose to retire within subsequent 10 years approximately , consider taking these steps today to assist make sure that you've got what you would like to enjoy a retirement lifestyle. Examining your income sources well beforehand of your target retirement date gives you time to form any necessary adjustments.
Start by envisioning the type of retirement you would like . Will you're employed part-time, volunteer, travel or just being take care of your family? Next, develop a sensible picture of the financial resources you'll need then determine if your current ones are going to be sufficient to support your plan. If you discover there's a niche, believe the way to accumulate the extra assets you would like, or adjust your vision to match your resources. By analyzing your current expenses, you'll identify discretionary items which will be eliminated or reduced.
"If you check out everything you bought over the course of a month, you'll be surprised at what proportion you'll crop to possess extra money to take a position for your retirement,"
Here are some steps to think about once you are approximately 10 years faraway from retirement.
1. Confirm you're diversified and investing for growth
If you are often tempting to keep faraway from stocks to scale back risk, but the expansion that stocks may provide remains important at this stage of your life. Consider maintaining a sound mixture of stocks, bonds, mutual funds and other assets that matches your risk tolerance, investment time horizon and liquidity needs. These what we call paper assets (stocks, bond, mutual fund, etc.). These kinds of assets that you can park your money and earn interest overtime. There are investment vehicle like Home rental properties real estate investments. These Investment opportunities can provide you passive income and cashflow. You can seek help to an Accredited Real Estate Broker to provide you some information about home and property investment.
Examining your income sources well in advance of retirement gives you time to adjust your plans if necessary.
2. Take full advantage of retirement accounts, especially know your investment contributions
In the Philippines, there are other investment vehicles like: life insurance, company investment ventures (e.g cooperative investment, shares investment and Company retirement fund). We advise to take time to learn on this investment vehicle and know how to earn interest on your contribution and how to withdraw it, when it time to retire.
3. Reduce your debt
Consider accelerating your mortgage payments so that the loan will be paid off before you retire. To curb new credit card debt, try paying cash for major purchases. By limiting new debt and reducing existing debt, you can minimize the amount of retirement income that will be spent on interest payments.
"If you pay off a credit card that charges 15% interest, it's like earning 9.9% on a risk-free investment,"
4. Calculate your likely retirement income
Calculating your retirement income is calculating the cashflow that you receive every month, where you are not working anymore. Example, my friend's dad received a pension in SSS(social security system) of P5,000/month. He use his Company investment contributions and purchase a Home rental property that gives him a cashflow of P5,000/ month in San Francisco Heights Calamba. This give him a P10,000 in his pocket monthly. However, he still have a monthly health maintenance of P4,000, Utility bills of P2,000 and food cost P2,000 as they live on their own home with my mother. This mean my friend's dad net income is P2,000. Just focus on the net that you keep and plan how this net increase by investing on paper assets.
5. Plan where you will live
As my friend's parents retire on their work, they realized it hard to take care of a big house as we move along with a family of our own. They purchase a single detached home in Calamba City. and happily enjoying there lives together. They purchase a property in the same place for rental property as they are the property managers of their own properties to decrease some labor cost and enjoying the community.
It's never too late to get started
When your planned retirement date is a decade away it can seem like a distant event. But it's important to plan carefully and set realistic goals so that time is on your side and can help you have the means to enjoy the sort of retirement you have always dreamed of.
Even if you started saving and investing for retirement late, or have yet to begin, it's important to know that you are not alone, and there are steps you can take to increase your retirement savings.
Owning one’s house is perhaps might be a Filipino dream. It gives every Filipino family a way of security that there’s always be a roof over one’s head. But like any dream, the road toward this goal is usually daunting that the primary time home buyer is nearly always tempted to settle with the first house that falls within his or her price range without giving the acquisition much thought.
To make matters worse, the plethora of taxes and costs that has got to be settled and paper works that require checking out are enough to form the first-time buyer feel hesitant, confused, and nervous.
As with any major purchase, buying a home requires much research, many help, and unending patience. you'll also had best to require the following pointers into consideration.
1. Know your needs before buying a Home
First things first: What are you trying to find during a home? Or more appropriately, what kind of home fits your lifestyle?
There is an enormous sort of house and apartments available out there, and selecting one is probably the primary big decision one must make. believe whether you would like to measure during a single-family home with a yard, a condominium where a property management office does the upkeep , or a farm.
Consider also the general utility you desire. does one need a house with four bedrooms? what percentage bathrooms? does one want separate recreation room for youngsters to enjoy or a den for your privacy? Garage for the car or a workroom? How fancy or large of a kitchen would you want? List these features so as of importance.
2. Research the project's market and its community.
Once you've got identified the sort of property you would like and wish , it’s time to research the market on what’s available out there. don't accept the what friends and colleagues suggest to you. Just seek a Professional Real Estate Broker. In fact, the Philippine land market is booming, developers have many units in their inventory.
This is also an honest time to research about the world or location you've got in mind. Does it have good transport connections, hospitals, schools, banks, and commercial areas? More importantly, does the municipality or city where the property is found have good infrastructure to guard houses from floods and other natural calamities?
3. Create a budget for your planned purchase home
The second step is creating a budget and sticking thereto . this needs taking an extended , hard look on your finances. Determine the worth range you'll afford and the way much cash available for the deposit and buying costs. this may enable you to work out what sort of property you’ll be ready to afford.
As a rule of thumb, prepare a minimum of 20 percent of the acquisition price to qualify for an 80 percent loan-to-value ratio loan, and a further 5 percent of the property’s price to require care of fees and other buying costs.
Once you've got determined your budget, you’ll then know what sort of property and where you'll afford. does one want the most important and best house within the best neighborhood that you simply can possibly afford or does one need a more conservative overhead and debt?
4. Seek help from accredited professionals
A real estate broker or a accredited salesperson, of course. These are the people that can and definitely want to assist you successfully make that purchase.
Real estate brokers or salesperson will locate several homes that suit your needs, assist you select the right home, negotiate the terms and conditions of purchase, and usually assist you through the method .
Mortgage brokers also will assist you find the real estate loan with the simplest terms for your situation. Closing services will organize and manage the paperwork to assure a smooth transaction.
First-time buyers are usually a touch nervous, but counting on professional advice can ease the strain . Tell the professionals what you would like , and allow them to assist you .
5. Research the developers background
Developer is the one who is you making deal too. They develop the house that you want to purchase. This is especially more important when buying a pre-selling property. Developers are often generally separated into two main categories. First you've got the highest developers, most of which are listed and have substantial capital and a diary of success. Purchasing a house from one among these developers is almost risk-free, because these developers are concerned about their reputations. e.g are Megaworld, Alayaland etc.
On the opposite hand, you've got first-time developers, who, although not all are bad, do business against the chances . First-time developers haven't any previous record of success in land development, and since of their first-time developer status, it’s hard or maybe impossible for them to access commercial loans to finance their projects. Once the first capital has been spent, continued financing for the development and development of the project will begin of their clients’ pockets. because the level of sales drop, the developer begins to encounter financial difficulties as income is a smaller amount than anticipated, or the project construction will begin to suffer more and more delays as a results of unwise spending. These developers hold little prospect of success and their projects are likely to fail due to insufficient experience, knowledge, and capital.
6. Secure Financing for you mortgage
If you're getting a bank to finance your home purchase, confirm that you simply have all the required documents with you, like tax returns, payslips, or employment certificates. Getting a real estate loan also can be very complex, so be prepared. It also pays to hunt the assistance of a mortgage broker, as not all loans are uniformly created. Try do to loan shopping; that's , lecture several institutions and comparing their rates and terms. This can be an additional service of your real estate broker or salesperson. As approval for loan also depends highly on your credit history, confirm to sort that out before applying for one.
7. Make sure you're not in a financial red line
Finally, the method of shopping for your first home doesn't end once you move in. Financial red line is when you feel that you monthly budget is jeopardizing your monthly needs. e.g your Mortgage eating your monthly food budget. On top of the mortgage, which you would like to pay monthly, there are other expenses to require care of such repairs, association fees, insurance -- the list goes on. The rule of thumb isn't to spend quite 30 percent of your monthly pay on paying off mortgage loan; anything above this and you'll find it difficult to deal with your other expenses.
About the Author
Have you ever been in a home you think you can't afford? If your answer is yes, today is your lucky day!