When it comes to money matters, Filipino parents put too much focus on securing their children’s future that they often forget that they also need to set aside money for their retirement fund.
According to a recent survey published by Manulife, Filipinos only set aside around 3.6 months worth of personal income by the time they retire. Other Asian countries like Taiwan have retirement savings good for 4.5 years, while China and Indonesia have retirement money that can last 4.1 years.
The reason: Filipinos expect the lowest amount as sufficient for retirement, and we almost never think of a retirement fund until we are near that age.
According to the survey, Filipinos think that savings equivalent to 2.1 years’ worth of personal income would be enough for their retirement fund. Comparing it to Taiwan’s expectation of 19.6 years and China and Hong Kong’s 15.4 years, we set our expectations way lower than our Asian neighbors.
When we think of retirement, we imagine settling into our dream house without having to worry about money. In our golden years, we deserve to sit back, relax, and just enjoy the fruit of our labors. However, most Filipinos — 84% of those surveyed by Manulife and most of them aged 50 and above — plan to continue working past retirement age, either on a full-time or part-time basis.
Top reasons include keeping busy and occupied, physical and mental health, pursuing interests and enjoying life, as well as financial considerations like improving living standards and saving more money for the future.
These future senior citizens aren’t looking at pursuing labor intensive jobs. Many of the Filipinos surveyed would like to take advantage of online jobs, including home-based work or selling things on online platforms like Lazada and Shopee.
A good strategy is to compute your retirement fund using an annual inflation rate of 5%. “Consider your standard of living today and how much it will cost to maintain until you reach 60,” writes Chinggay Labrador in a Good Housekeeping article. If you are in your 50s, which is a little late in the savings game, you need to set aside 25% of your gross salary now until you reach retirement age.
It’s hard to imagine setting aside money for retirement when there are so many expenses to think of especially when you have growing children, but having a retirement fund gives you more freedom to enjoy your golden years. Rather than putting the burden on your children to take care of you, wouldn’t it be nicer if you are able to take care of yourself and enjoy the money you worked so hard for?