Tips on retirement planning on the Philippines

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.