Retirement doesn’t happen overnight. It takes planning, commitment, and of course, money, for financial security. We delve into how you can smoothly transition into it. 

By law, Filipino employees usually work eight hours each day, five days per week. This mostly applies to Filipinos in corporate jobs, as the hours may vary depending on what industry they may be working for. The law also states that the retirement age in the Philippines is 60 or 56 years old, just like what the House of Representatives has acted out.

Likewise, in a survey conducted by Milieu in 2022, results showed that 62% of the respondents want to retire in their 50s or 60s. This was conducted in five countries and among those, Filipino respondents showed the most interest to retire early—standing at 18%. 

Though there are people who plan to retire at the early age of 50, about 60.3% are not so optimistic about their financial preparedness for retirement. If you consider yourself to be a part of that population, here are some retirement tips that will help you prepare for it better.

7. Determine Where You Will Live

One of the main factors that you should consider before retiring is that you should know where you’ll settle when the time comes. Thinking of this ahead makes you more prepared for it. With that, consider thinking about what you need for the future such as the floor plan for your house, an accessible location, or an environment you always wanted to settle in. 

When choosing a retirement home, always think about your comfort since it’s more likely where you’ll grow old in.

6. Clear Your Debts 

Retiring means that you will no longer be working like how you used to. It also means that you will no longer have that steady income unless you have an ongoing business. Keeping that in mind, it’s a good practice to stay debt-free before retirement. 

Try to repay your debt before retirement or at least keep it to a minimum before doing so. That way, your responsibilities when you retire won’t be that heavy compared to when you were still working. Settling your debts ahead of retirement will also make you get the most out of the money you have saved. 

5. Monitor Investments 

While you’re still young and capable of working hard, try to allocate some of your money to valuable assets such as stocks, mutual funds, bonds, or shares. Some insurance plans also come with investments that you may withdraw after several years. You may also invest in businesses that may yield great profit over time. 

Always make sure to keep your investment portfolio in check so you can monitor both the bullish and bearish runs of each one. By monitoring the performance of your investments, you can keep track of the income you generate and be mindful of the decisions you’ll make. It can also be a way for you to earn even when you’re retired.

4. Check Your Government Contributions 

By law, employees are required to pay their monthly contributions to government agencies like Social Security System (SSS) or Government Service Insurance System (GSIS), Philippine Health Insurance Corporation (PhilHealth), and the Home Development Mutual Fund (Pag-IBIG). These are required from every Filipino, the moment they get their first job. 

SSS and GSIS, specifically, have pension plans for their members once they retire. This is why retired Filipinos can receive a monthly pension which is a fraction of what has been paid for during the working years. With that, it’s a great practice to ensure that the monthly contributions are settled while working so that the benefits can be enjoyed years after. 

3. Estimate Retirement Expenses

Before coming up with a retirement budget plan, you should first identify the things you will want to do when you reach that point. Will you just settle at home? Will you travel? Will you buy a new car? Ask yourself questions about what you want to achieve when you retire and start to draw your budget from there. 

If possible, visualize a routine that you can stick by so you can determine how much you will be spending. When making rough estimates about your future expenses, consider thinking about inflation—as the prices now won’t likely be the same several years from now. That way, you can be more realistic with the amount you want to achieve. 

2. Think of Future Medical Costs

Aside from leisure and livelihood, your retirement plans should also cover possible medical costs—including hospitalization, laboratory tests, and medicine. After all, healthcare services can cost a fortune, so it’s best to have an emergency fund that you can easily access if the need arises. This should be considered early on, especially since it will be harder to get medical insurance and protection as you get older. 

Also, try to maintain a healthy lifestyle while you are young. Get regular checkups, exercise, drink water, eat healthy, and try to keep your body in its best condition. The more responsible you become with your health while you’re still young, the fewer health risks you can be faced with.

Though health may be unpredictable at times, establishing a great condition can make your body withstand challenges and possible diseases. 

1. Save Your Money

Be responsible and avoid unnecessary spending. Always prioritize your needs rather than your wants and make sure to allocate a percentage of your income for savings. By making it a regular habit, you won’t have a hard time establishing a great retirement fund that you can count on when you decide to do it. 

Try saving up some money early on in life, instead of just doing it a few years before you plan to retire where you may feel more pressured. Keep the money in a separate bank account so you won’t be able to withdraw it easily. You may also want to seek the advice of financial experts for this matter. That way, you can prepare yourself for a comfortable retirement. 

By keeping these tips in mind, you can start your path to a financially stable and happy retirement. Just remember that developing these habits takes time and persistence, but the benefits that come with financial stability and peace of mind are worth it, especially after years of hard work.

And regardless if you’re an employee or a business owner, keep yourself inspired by imagining the future you want and taking motivation from the success stories of those who retired comfortably.