Reasons You Should Have A Retirement Plan
You’re young and semi-carefree. That’s the life most of us are living right now. Being young and not having too many responsibilities can have you believing life will be this way forever, but the truth is as we age, the responsibilities of life pile up faster than we realize.
Before we know it, we’ll be our parent’s ages, wondering where all the time went and what we’re going to do about the times to come.
With the economy on a never-ending rollercoaster, the stability of our golden years is uncertain. Whether you’re a college freshmen or a young professional in their late 20s/early 30s, the time to start planning for retirement is now. Not sure if it is worth it? Think again.
Retirement opens a whole new chapter for many individuals, when they pursue the ‘work they love to do’ and convert their hobbies to professions. There’s an increasing trend of individuals opting for voluntary retirement as they reach the other side of 40s and live for over 85 years.
Early planning for retirement is critical because it typically takes many years to accumulate the necessary funds to live comfortably when you no longer enjoy the advantages of a salary. If you begin your investing early in your working life, it will allow funds to accumulate and grow over the subsequent decades, so that you have substantial resources for navigating your retirement years.
Though the wisdom investor segment (45 years and above) scored better in the level of confidence, their percentage stood at only 24%.
There are many reasons why planning for retirement is important like any other goals:
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Increase in life expectancy: Our generation will live longer than previous ones due to improved medical and healthcare, implying the need to gather enough funds that can sustain longer life. This also implies that the healthcare needs and expenses are likely to haunt us.
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Shortfall in Employer Funded Pension/Pension Funds : The employer or government funded pension schemes are less likely to sustain the income needs post retirement. The pension that one may receive from these schemes will not be sufficient to maintain the lifestyle. This is the reason many individuals worldwide supplement their state or employer funded retirement plans with self-funding- i.e. pension plans.
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Change of social structures: In spite of family support, many retirees don’t prefer depending on the relatives or children for meeting post retirement expenses. Maintaining independent lifestyle is sustainable only when backed with a financial cushion.
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Lack of social security system: There is no social security system in our country. Hence one has to plan to build the entire corpus to help meet the regular income or any contingency post retirement.
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Desire to remain contributor: The want to contribute to the family by providing and supporting the kids or grand kids at milestones of their life remains even after retirement is inevitable. Starting an independent venture is also an emerging trend. These can be fulfilled only when one is financially self-reliant.
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Rest and relaxation: After fulfilling all your responsibilities, you may want to build a retirement corpus to go on holidays, to pursue a hobby etc.
Keeping these key points in mind, it’s advisable to seek guidance from a financial planner for his expert views on your financial plan. Retirement is not just about age, it’s highly dependent on the kind of lifestyle you’re living and wish to continue living.
Quality of Life
Retirement brings a space and time that a working life makes difficult. It's an opportunity to collect experiences and engage in activities you found tricky to manage in the midst of the persistent responsibilities of a busy career. However, enjoying that high quality of life will require significant savings.
Savvy and responsible retirement planning enables you to make your retirement years a time to thrive and indulge yourself. Insufficient retirement planning, meanwhile, can force you to scrimp and save and to worry over your resources, making money a restrictive force rather than a freeing one.
Long-Term Care
Long-term care refers to regular care for people with a chronic illness or disability, such as through an in-home caregiver, adult day care or an assisted-living facility or nursing home.
Approximately 70 percent of Filipinos over the age of 65 will need some form of long-term care.
Philhealth only covers medically necessary skilled home health care or nursing facility care.
Long-term care insurance is an option, though policies differ on which forms of care they will cover. Incorporating long-term care costs into your retirement savings calculations helps fill gaps in coverage.
Kaiser Ultimate Care Plan is the answer to this problem. If you want to know how much will it cost you, just message me and we will be happy to work it out for you.
