Common Mistakes in Retirement Planning

Retirement planning is long existed as far as we know today.  Companies who took care their employees from the date of their hiring, and up to the date of their own demise after they got retired (even the casket and funeral services), are now considered a dream company to be employed.  Because of emerged globalization and liberalized market, companies as well as policies in employment changed.  And one of these changes is retirement packages.

Today, only top 100 companies in the Philippines are only offering decent retirement packages that offers one to two months of monthly salary.

But is it enough?

Here are some known mistakes in retirement planning:

  1. Dependent in social security pension funds. If you plan to retire thru your SSS pension, no other investments and business established, you are in doom! SSS funds will never be enough for your medications.
  2. Retired Too Young and Retired Too Old.  The optimist retires too young and outlived his retirement savings and the pessimists retired too old and unable to enjoy his retirement days because of health condition.   There is nothing wrong to retire early, unless you can sustain your living until you reached 65.  The major mistakes of people who retired too early is outliving their savings thru various vacations, travels, and business ventures that never been profitable.  Until they realized they were already too old to return in employment.
  3. No Concrete Financial Plans.  Pursuing successful retirement days requires early seeding of funds thru long term equities, establishing small businesses while in employment, discipline in budgeting, and getting life insurance that have links in investments such Universal Variable Linked.

Retirement is not necessarily you are stop working.  Retirement means, you retire from work you may be don’t like, and decided to pursue other things that may inspire you and keeps you in passion.

And retirement can also be an opportunity for your lost moments with your family.  How many graduation of your children did you attended while you are busy in your work?  How many breakfast you had skipped in order to be in work on-time?

My friend, plan your retirement today.  Discussed it thru your wife/husband.  If you are still single, consult with your parents.  Retirement is not also about money, but also include person who will affect if you retired.

“I’ve never seen anyone plan to fail in retirement , but I’ve seen a lot who failed to plan for their retirement.”

Dean Pax Lapid

Happy To Become A Happy Retiree

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Eleison Cruz

Financial Consultant. Personal Finance and Investment advocate. Author of The Good Asset, a blog that educates people in investments, financial literacy, and life insurance. Visit www.thegoodasset.ph

2 thoughts on “Common Mistakes in Retirement Planning

  • January 19, 2016 at 1:58 am
    Permalink

    Hi Sir Eleison.

    This topic (retirement) is very close to my heart, as my advocacy focuses more on this. Specifically EARLY retirement.

    Pls allow me to share my views on point #2.

    If someone wishes to retire early, then retirement savings (or something similar like growing your money in the stock market or MF) should not be their strategy.

    Rather, they should focus more on building their businesses. Because businesses gives continuous monthly income (though not guaranteed). If the business income can already support their expenses, plus their desired lifestyle, then by all means, enjoy your retirement 🙂

    In my personal point of view, building a business that gives monthly income equal to my salary, is much more doable than building millions of pesos to support me (and pray that I won’t outlive it).

    This is also what I suggest to “old” people who no longer have time to grow their money. Build businesses.

    Thank you sir for the opportunity to share.

    Reply
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    January 19, 2016 at 1:45 pm
    Permalink

    Thanks Carlo! Establishing a business while being an employee is the best option for preparation for your retirement. The plan should not only focused in long term investment, but also for short term investments. Various short term investments such special deposit products of local banks offers 5 to 7 years time deposit (eliminating withholding taxes).

    Entrepreneur or being an employee? Both!

    Reply

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