Retirement usually happens during the senior years but some people choose to retire earlier. When it happens, you’d want to enjoy the years while being comfortable with your loved ones.
However, statistics tell a different story.
According to the Head of the Bangko Sentral ng Pilipinas, around 80% of Filipinos nearing retirement age are financially unprepared for the cost of living beyond their employment years.
To avoid going through the same issues, we have to do proper planning. Every retirement story is unique and you can make yours a memorable one. Here are some tips that will guide you through retirement planning so you can enjoy life comfortably after years of hard work.
Tips to a worry-free retirement
1. Pay attention to your health now
Good health is one of the key factors to living a good life. If you want to live comfortably during your retirement years, you should start taking good care of yourself now. It’s time to get more serious about regular checkups and keeping a healthy lifestyle. As they say, prevention is better than cure. Even if you feel healthy today, there’s no reason to skip annual checkups and preventive exams. It will also be ideal to develop healthy practices like exercising, eating right, and getting enough sleep because these can impact your physical and mental wellness.
2. Start a hobby
Your pre-retirement years are also the best time to start a hobby or go back to the activities that you like doing. Keeping hobbies is good for wellness. By developing one before you retire, you can engage in an activity that can help you de-stress and remain mentally productive even when you are no longer working.
Hobbies also come with benefits such as health improvement and reduced risk of high blood pressure. It even helps prevent depression and dementia.
3. Cut your expenses and save more
Rethink your spending habits. Start spending less while you are still working. This will allow you to put more cash into your savings. Develop smart spending habits that’ll help you smoothly transition to retirement years, even by the time when cash flow is already limited. There are expenses that you can reduce without sacrificing the lifestyle you prefer by considering your actual needs. For example, you can downgrade cable subscriptions especially if you are only viewing a few channels most of the time.
4. Start paying your debts
While you want to save more before you retire, you should not ignore your debts. It is ideal to pay them off so that you’ll have fewer financial obligations during your retirement years. If you are having difficulty in eliminating debts, you can start by paying off the smallest loans. Ticking a loan off your list one at a time creates a sense of accomplishment. It can also motivate you to continue eliminating other debts until you finally pay off the biggest one.
5. Build a fund for the long-term
It will still take a huge amount of money to live the life you want once you retire. You’d be very fortunate if your retirement pay and government benefits will be able to cover all of it.
According to experts, you’ll need around 80% of your final pre-retirement salary for your retirement income. If you are currently making ₱400,000.00 a year, you’ll need at least ₱320,000.00 annually to live comfortably during your retirement years.
This is one reason why you should build your fund early and for the long term so you can have a lengthier time horizon to grow it. The longer you can play with investment instruments like mutual funds, the stock market, and cryptocurrency, the higher the chances to build the fund you need for retirement.
6. Research your options on how to build money
Research options on how you can build your retirement fund. You’ll be in a better position if you can maximize your earning potential now. Aside from venturing on a business or doing a side hustle, there are financial instruments like life insurance that can serve this purpose.
Sun Life offers life insurance options to meet varying needs. You can get a VUL policy and choose *MyFuture Fund as the mutual fund option to supplement your VUL life insurance.
MyFuture Fund uses a glide path-based methodology wherein more of its assets are allocated to higher-risk instruments such as equities early in the fund’s life. This will provide a greater opportunity for capital appreciation over the long term.
As the fund nears maturity date, assets will be allocated more in fixed income securities, such as bonds and money market instruments as this will help reduce risk and price volatility to cater more to preserving the clients’ fund value.
*MyFuture Fund is offered as a fund option exclusive to Sun FlexiLink, Sun FlexiLink1, Sun FlexiLink Assist, Sun MaxiLink 100, Sun MaxiLink One, Sun MaxiLink Prime, and Sun MaxiLink Bright.
7. Consider getting professional financial advice
There are matters about retirement planning that you can sort out better by getting professional advice. A financial advisor can provide an assessment of your current situation and help you develop a plan based on your goals and financial concern.
If you haven’t reached out to a financial advisor yet, you can leave your details here to get connected with a Sun Life advisor.
ALSO READ: Retiree mistakes to avoid
You have the power to make your retirement years as good and as comfortable as you dreamt it to be. Don’t wait too long before you start with retirement planning. A worry-free retirement is possible. But first, you have to take the steps to make it happen.