3 scary facts you don’t know about retirement

Lianne Martha Maiquez Laroya

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Too young to retire? Let's see what you think about retirement planning once you read about these facts

PLAN EARLY. Face your financial fears now that you're still strong and capable

MANILA, Philippines – Do you think that retirement is easy, peaceful and relaxing? Majority of Filipinos don’t even enjoy it at all.

20-somethings don’t give retirement planning a lot of thought. Some of you may simply depend on the retirement package that your employer will give you, while some of you may even think of your future children as your “retirement plan.”

After all, why should you plan for retirement right now? You’re only in your 20s – surely you have more time left to prepare for it?

Well, let’s see what you think about retirement planning once you read about these 3 facts.

Warning: We will not be responsible for the sleepless nights, sudden anxiety and several days of shouting “OMG!” that these facts may ensue. Proceed with caution.

1. The life expectancy of males and females are now longer than ever.

Last 2011, life expectancy of males is 65.61 years while females were expected to live up to an average age of 72.17 years. Now, the National Statistical Coordination Board estimates life expectancy to be at 67.61 for males and 73.14 years for females.

Translation: Because you live longer, you have more time in this world, hence, you need more money to be able to provide for your lifestyle. If you have great genes, you may even live up to 100! (My great grandfather lived up to 99 – his only regret was that he wasn’t able to watch the last few episodes of Marimar.)

Action Plan: Let’s say you’re a female with a life expectancy rate of 74 years. You stopped working and decided to retire at age 65. This means you still have 9 years to enjoy retirement, right? To give you an idea of how much you’ll need, what’s your budget for every meal?

How much are you willing to spend for every meal? P200? P150?

Okay, assuming that fast-food chains still have budget meals, you’ll need P50 for every meal.

You’ll need 3 meals every day for 9 years, right?

P50 X 3 (meals) X 365 (days in a year) X 9 (years) = P 492,750. You need P 492,750 for your P50-meal only. You don’t have budget for water and electricity yet – you can’t even brush your teeth with this amount!

Note that this amount doesn’t even cover the estimated annual inflation of 3%. Also, let’s be honest here: are you really just going to spend P50 for every meal…for the rest of your life?

2. Out of 100 retirees, 45 of them still depend on their relatives for their daily expenses.

The remaining 30 of them depend on charitable institutions to survive.

On another note, the average monthly pension in the Philippines is only P 8,000. (This is already a high amount, in my opinion. My retired aunt only receives P3,500 monthly!)

Translation: Can you imagine being a burden to your loved ones when you’re already old, weak and frail?

Can you bear to hear your child’s frustrated remarks, or your nephew’s verbal abuse?

Okay, your own child may be kind and polite to you – but have you ever thought about your son-in-law? What if your kid marries an impolite and greedy witch?

Action Plan: Don’t be a burden to your relatives. Don’t depend solely on SSS to survive. Figure out how much money you need to fund your retirement fund.

3. Out of 100 retirees, 22 of them continue to work.

At least these 22 retirees aren’t depending on other people, right? They’re depending on themselves – on their own income and on their own jobs to provide for their retirement needs. Sure, some of these people may be working because they simply love their work, but what if some of them are just working simply because they don’t have anything to eat?

Translation: Older people are more prone to getting medical illnesses. What if you’re already a diabetic when you’re retired? Which would you like:

a. Will you, an old, ill and nice-looking elderly, continue working because you need money to pay for your insulin? You’ll barely have time to relax and enjoy your time with your loved ones! (Then again, your loved ones may not like visiting you because you kept on asking them for money…)

b. Or will you prepare for your retirement now that you’re still young, healthy and good-looking? You’ll have lots of time (and money!) in the future. Your loved ones will definitely visit you and enjoy your company!

Action Plan: Check your monthly budget and figure out how much you can afford to set aside monthly. Your budget will always have variable expenses – if you’re really dedicated to reduce some of them, you can do it.

Also, do you want a healthy slap of reality? Figure out how you can get your net worth to know where you stand financially.

Now, are you still thinking the same about retirement? Or has your view on retirement planning changed dramatically?

Face your financial fears now that you’re still strong and capable. You don’t want them to constrain you in the future, do you?  Rappler.com

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Lianne Laroya

Lianne Martha Laroya is a financial advisor. She’s also the founder of The Wise Livinga website dedicated to educate you on money management and early investing without boring you to tears. Get your FREE copy of her basic personal finance book for 20-somethingsConnect with her on Twitter, @MsLianneLaroya

Ready, set, retire! image from Shutterstock.

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