mamaravesph's blog: 3 Things That You Thought Are Good Retirement Plans

I have come across people who think retirement is age 65, some 60, and others as early as 50. After talking to maybe a thousand people (on rough estimate), one on one, they seem to think it is their right. A right to stop working at the age they prefer or like. But retirement is more than an age or a number. It is a GOAL. A goal to stop working and relax and enjoy your last years at a certain age YOU HAVE PREPARED FOR.

If I ask people if they have set aside for this goal, the answer is a blank face with no certain answer to my question. And then, they enumerate things they call retirement plan. But I disagree. Here is why:

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YOUR HOUSE & LOT IS NOT A RETIREMENT PLAN. It is an asset you can keep where you can stay comfortably in your twilight years. If you sell your house and lot, you will be forced to rent or pay for a home you already had before. You will just be going to liquidate an asset to get the lump sum money but will diminish and be used up in time. And some retirement CAN BE LONG.

But if you’re going to sell it, and buy a smaller house to maintain then I say that is a good move. Maintaining a big house means big expense. Maintenance and utility bills can be a big chunk in your monthly expenses so moving to a smaller place can be a good move for you.

YOUR CHILD/CHILDREN IS NOT A RETIREMENT PLAN. I’ve heard this on and on from ageing parents that they have their children to take them in when they are old, but sorry your child/children is not a retirement plan. You will put them in a position where they have to financially support you while supporting a family. The stress they will have to put through just to get everything together and paid is really hard for start-up couples with children. If you want your child/children to be financially stable, help yourself. And maybe then, they can start their lives with responsibility and a lot of savings.

YOUR SSS AND RETIREMENT PAY MAY NOT BE ENOUGH. Your SSS can be your monthly pension and your retirement pay from your employer can be your lump sum pocket money. But believe me, these two may not be enough for you. If you want to know how to compute for your monthly SSS pension, please go to http://mamaravesph.blogspot.com/2013/12/how-to-compute-for-your-sss-monthly.html. And if you want to know how much retirement pay you are getting from your employer, please go to http://mamaravesph.blogspot.com/2014/10/abc.html. Medicine costs at your fragile years can eat up your whole SSS monthly pension, and one hospitalization can eat up your whole retirement pay.

The key here is saving more than what is expected and deducted to you by the government. You should have shaved a percentage of your earnings from your monthly income and invest in an investment tool you can feel secured.

If you want to know more about Financial Planning tips and ideas, please visit http://www.facebook.com/FinancialFreedomBlueprintPH.

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