Retirement may be something that some people are looking forward to; at a certain point in your life, you may already be looking forward to finally dropping your job and spending your days in peace. While some people are married to their professions until their bodies cannot take it anymore, others are working hard so they can retire early. However, is retirement planning really for everyone? Also, what is the importance of planning your retirement as early as now?
Why do people have to plan their retirements?
Contrary to popular belief, retirement planning goes beyond just putting up savings and keeping up with your monthly social security payments. While most of us may get contented with the rewards we are going to reap in the future, social security benefits are actually not enough for some people, especially for folks who have ambitions such as traveling the world, buying a beachfront house, and other goals. If you have already created a bucket list of things you want to do after working for years, you need to know why you should plan your retirement early on.
1. Your social security benefits may not be enough in the future
What you reap is what you sow, and this is definitely the case for social security benefits. Unfortunately, these benefits have a fixed monthly amount unless there is a new law that will amend the amount given to the beneficiaries. While social security benefits may be adequate today, there is no guarantee that they will stay the same in the next years or so. Factors such as inflation and the market’s volatility will definitely play a huge factor in the future, and your pension may not be enough.
(Check out: Discounts for Senior Citizens in the Philippines)
2. You may encounter severe health problems in the future
As we age, our bodies tend to become weaker, and this makes us more vulnerable to different kinds of illnesses. Unfortunately, older people are more prone to illnesses even with strict diet and a mountain of supplements—and a lot of diseases arise as people come to age. While we may have a government-mandated national health insurance program, the coverage of this is limited, and treatment may cost you a lot in the future.
3. You may want to make sure that your future nest egg is in order
The future is certainly dark, and no one can certainly say what will happen in the future. While most people iron out their retirement to make sure they will not encounter speed bumps in the future, planning is also essential for people who want to put their finances in order. Retirement planning, which includes creating a nest egg for your golden years and planning how your estate will be distributed thereafter, is something that can also be positive.
How can you make sure that your retirement period is a smooth sail?
Fortunately, retirement planning is much easier than before. With a wide number of investment options available as well as different strategies to allow you to plan your dream retirement. What are the ways you can make sure that your golden years will be prosperous and hassle-free? Here are just some of the ways you can supercharge today your retirement tomorrow.
1. Determine what age you want to retire
According to the law, the mandatory retirement age for employees is 65, but there are professions require people to work for a lifetime. Regardless whether or not you will work beyond the age of 65, it is still a wise choice to set a target age to go out to pasture. Once you have a target date for your retirement, you can start scheming for your retirement plan and put your start looking for ways to build up your retirement funds.
2. Plan how much you want to save for retirement
Are you planning to see the seven continents when you get old? Or do you want to buy a beachside villa and spend your golden years watching beautiful sunsets? Whatever your goals are, make sure that you have a concrete number in your head. This will allow you to have a clear visualization of your retirement plan, and will give you the chance to create a solid game plan on how you will take care of your finances.
3. Apply for sufficient life insurance
Retirement is all about battling with all the uncertainties, including the possibility of your untimely demise. If you think that your family will suffer financially when you kick the bucket, it is wise to apply for life insurance. While getting life insurance is your top priority, the amount on how much you want to invest will depend on you. Think of factors such as their age when you retire and other variables to give you a perfect understanding on how much you should invest in life insurance.
4. Find out if there are tax breaks for you
As a way to encourage people to use their money more wisely, the government gives out tax breaks to individuals of certain industries. More common among overseas Filipino workers, tax breaks will allow you to have enough leeway for expenses for your retirement plan. In the case of overseas workers, the amount you can get for tax breaks can be used for your retirement plans such as savings, insurance, investments, and other things.
Let’s face it: no one wants to work for the rest of his life. After all, the best way to enjoy your golden years after decades of working hard is by simply relaxing and not worrying about money anymore. Who wouldn’t want that?