Retirement is not a matter of age but rather a matter of choice. Retirement is not you reaching 60 but rather you have savings and investments that you can stop working at whatever age you are in. My heart is to help you learn more about it so that you can prepare for it and make savings and investments aligned with your financial goals. I want to see more and more Filipinos live their lives with them not chasing after money.
This is the 3rd part on our series on Retirement and I have asked fellow RFP Ge Cantor to share on Why should you prepare for Retirement?. You may check Part 1: 10 tips to a happy and comfortable retirement and Part 2: What is Retirement to you? by clicking the links above.
“When a man retires, his wife gets twice the husband but only half the income.” (Chi Chi Rodriguez, Puerto Rican professional golfer)
Time flies. I just visited St. Luke’s Quezon City for a check-up. While at the Cashier, the lady asked me if I already have a record in their hospital. I was tempted to say, “yes” I was born here 39 years ago! The good thing about visiting hospitals is you get to appreciate the cycle of life. You see parents happily carrying their new-born babies. On the other hand, you also see children accompanying their elderly parents. Time really flies. While you may be in your 20s, 30s or 40s, in a blink of an eye, retirement knocks on your door. So why not start preparing for it now while you are still able and have time?
Albert Einstein. The great genius considered compound interest as the eighth wonder of the world. The money you save not only earns interest, but the interest earns interest, like your children having grandchildren. According to the book, “The Procrastination Equation,” such is its power that if you put aside $5,000 each year between the ages of 20 and 30, you would retire richer than if you started putting that five grand aside every year from the age of 30 on. When you procrastinate in saving money for retirement, you lose all those compound interest and potential investment dividends or earnings.
Toilet cleaner. Manang was a 72-year old Filipino lady, who worked in a hospital in Hawaii where my Mom was confined last year. Despite her advanced age, Manang was still cleaning the patients’ private rooms and toilets. I recall asking her why she still working. She just said that she cannot afford to retire yet as she has no savings and she is still supporting her children’s children back home. One of the reasons why you will want to start saving for retirement is because you don’t want to keep on working till your last breath. Those who are unprepared for retirement have no choice. Is this really something you want to do?
Aging. Mark Twain (American author and humourist) said that “Age is an issue of mind over matter. If you don’t mind, it doesn’t matter.” In reality, aging costs money. As people age, they tend to have higher risk of developing disabilities and contracting diseases. Saving for retirement can help you prepare financially for long-term health care and, in some cases, for life and death situations.
Nth birthday. According to a World Health Organization (WHO) report, Filipinos’ life expectancy for both sexes was 70 years in 2009: 67 for males and 73 for females. Thanks to medical advances and healthier lifestyles, Filipinos may live longer. Obviously, living longer means you should save more and save earlier for retirement.
Diminishing return. Generally, a person starts out making very little money when he/she starts working, and then gets to make more and more as he/she gains more experience and skills. The trend to making more and more money does not typically continue especially when a person retires at some point. That is why you should prepare for retirement, as you cannot generate income for yourself forever.
Aquino’s SONA. In his latest State of the Nation Address (SONA), President Aquino stressed the need to increase Social Security System (SSS) monthly contributions, citing a 2011 study that warned that 28 years from now, the pension fund for private sector workers would be depleted. This news gives you more reason why you should save for retirement as you cannot completely rely on the government to finance your retirement years.
KKK. In “sales” lingo, KKK stands for kapamilya, kapatid, kapuso, etc. This relates to a salesperson’s “natural market” of prospects. In some cases, KKK also relates to people you can rely on upon retirement. In a typical Filipino family, parents feel entitled to their children’s support after providing for the latter’s education. One of the important reasons why you should prepare for retirement is for your children. As parents or future parents, would you really wish to put the financial burden of your retirement or eldercare onto your kids?
Actualization. “What a man can be, he must be.” According to Maslow’s hierarchy of needs, self-actualization refers to what a person’s full potential is and the realization of the potential. Typically, retirement is the best time to follow, pursue, or discover, your passion. Time to do something that matters. Time to help others and make a difference. Marc Freedman (CEO and founder of Encore.org) perfectly sums it up when he said that “You save not to have freedom from work, but to have freedom to do the work you want to do.”
Royal blood. Unless you are Prince George Alexander Louis of Cambridge or The Queen is your “lola”, then you should accept your fate that you need to provide for your own retirement expenses.
I’m Retired, Now What? As Jonathan Clement (British author and scriptwriter) puts it: “Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.”
Now to summarize why should you prepare for retirement? “T.A.T.A.N.D.A. K.A. R.I.N.!”. So should you start saving today’s money for the future, or are you still keeping up with the Joneses and spending tomorrow’s money today?
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