The Best Time to Start on Your Retirement Fund was Yesterday

The next best time is today

Alena Mae Flores

veteran business journalist

TIME IS YOUR BIGGEST ASSET Got your first job? Ten percent of your earnings should go to savings as soon as you start earning.

Retirement at any age can be a scary thought, especially if you are not financially prepared for it. In the Philippines, the mandatory retirement age for government employees is at 65 years old, although there are now moves by the Congress to lower the optional retirement age from 60 to 56 years.

The move, if approved, will give more time for government employees to enjoy their retirement benefits for as long as possible. On the other hand, private sector retirement age is from 60 to 65 years old, while there are early retirement options depending on what is offered by the company.

Yet, according to Wave 2 of the East Asia Retirement Survey of the Global Aging Institute (GAI) conducted in 2014, a staggering 90 percent of Filipinos are worried about being “poor and in need of money” during retirement. 

This sentiment showed that today’s workers remain anxious about their retirement security.

But individuals interviewed for this article firmly believe that the key to a comfortable retirement is saving at an early age. The longer time you save, the bigger your retirement nest egg in the future.


Why the Earliest is the Best

“At what age? As early as possible. The moment you start saving, the earlier you will reap the benefits. Most people put off to save because they choose to enjoy and spend their money right away. It is wiser to balance it with more savings than expenses. Remember, the early bird catches the first worm,” said Cesar Abaricia, communications and social performance manager at Pilipinas Shell Petroleum Corp.

“Always invest in retirement. Because as you grow older, your marketability and ability to adjust and adapt is challenged by the environment and society. You need your retirement plan that gives you all the financial stability you need. For your health, family, recreation, and to sustain your existence. It is your blanket in times of cold days,” he said.

Jingjing Romero, a long-time public relations practitioner, says 10 percent of earnings should go to savings as soon as one start earning.

“This way, your retirement fund will not be hard to save later on. When you hit 40, 20 percent of your savings should be allotted for your retirement fund,” Romero said.

Romero suggested investing in real property in choice locations in preparation for retirement.

“Choose property, which gives higher returns when divesting. Don’t invest in stocks if you don’t have lots of money to gamble. Insurance (Health and Whole Life) is important not just for your sake, but for the benefit of your loved ones. So invest in insurance as well,” she said.


You should invest in a retirement fund because at some point, either by age or circumstances, you will be faced with retirement.

Helen Arias, an employee at the Department of Energy says saving for retirement should start immediately after working “so you’ll have bigger savings at the end.” “About 15 to 20 percent of savings should go to the fund, to cover also inflation by the time you retire,” she said.

A female private sector employee who declined to be quoted for this article also said that saving for retirement should start when a person gets his or her first job.

“Future proofing oneself, is a decision that should be made early on, way before marriage or having a family. It gives more flexibility in terms of allocating resources for your retirement fund, it also builds discipline in terms of spending. Plus, the younger you start, the lower your payments will be if you course it through insurance agents,” she said.

She said people should invest in a retirement fund because at some point, either by age or circumstances, you will be faced with retirement.

“I read somewhere that you should not consider your children as your retirement fund. You should have your own fund and should be able to take care of yourself and your needs when you have reached that age. Setting up a retirement fund, investing in properties, putting up your own business are smart ways of future proofing yourself,” she added.


Why It’s Not Just About Living Comfortably 

The GAI survey also revealed that both the parents and their children are happier when retirees are more independent and self-sufficient.

For lawyer Rio Balaba, you should look at when exactly you intend to retire, and prepare for a 20-year saving period. Balaba said his retirement program started at age 30 because he wanted to retire at 50.

“The 20-year period for saving for retirement is enough. The first five- to 10-year period from start of work (i.e., 20 to 30 years old) is enjoyment of what you earn while still young. Travel, food, relaxation, etc,” Balaba said, adding that he expects to have PhP5 million by the time he retires.

He acknowledges that investing in retirement, especially one with a big financial goal, requires financial discipline. 

“You should (be disciplined) so that you can become self-sufficient when growing old. Tough one, but it can be done,” Balaba said.

Bottom line is, in planning for your retirement, find a good financial consultant so you can be properly advised.




About the Author

ALENA MAE S. FLORES is a business journalist for nearly two decades having covered the Securities and Exchange Commission, Board of Investments, Telecommunications and Energy beats. She is a former president of the Economic Journalists Association of the Philippines and Best Energy Reporter during the EJAP Journalism Awards in 2010.

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