Personal Finance 101: What You Ought To Know About Retirement

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MJ Gonzales │Executive

Like achieving body fitness with perfect abs, it’s recommended to follow rigorous diet and exercise to reach financially peaceful retirement.  The issue about SSS pension hike is a good wake-up call for all Filipinos to think about the time they stop working and the amount of money they’ll get when they reach 60 years old and above.  What do you think are the good steps to raise your retirement fund?

Whether President Benigno Aquino III agree or not on SSS pension hike of Php2000 per month, it is possible the worth of the said pension is not enough to cover the amount of expenses of retirees in the future.  Remember that each year there are various price increases in different commodities. Those hikes obviously affecting the value of money or what we called inflation rate.  Another point to consider is the limiting concept of people in building their retirement fund.

Rocking Chair, Retirement (photo by: Hitokirihoshi)
Rocking Chair, Retirement (photo by: Hitokirihoshi)

In America, a study of Fidelity Investments suggested that Americans should keep ten times of the amount of their final earnings to have sustainable retirement fund. There are factors they like people to think about when they retire such as savings factor, continuous withdrawal rate, savings rate, and income replacement rate.

Perhaps there’s huge difference between Filipinos and Americans financial lifestyles that they need to address accordingly. However, the common denominator here is to sustain not only our needs, but also our wants when we’re not capable enough to earn from working.  As for Filipino financial experts advised, it’s good to save money for 20 years if you’re planning to live 20 years more after your retirement age of 60.  Of course this commonly known as 20/20 retirement rule is just an ideal.  Filipinos can save longer or higher from what it suggests.  They can start building it by saving, budgeting, and investing.