Plan to retire in style

When you’re young and busy with work and life, it’s hard to think about retirement. It seems so way out of one’s range of vision since there are more seemingly important and urgent things to do.

But financial planners recommend preparing for and saving up for retirement early. Why? This is because 73 percent of those who retire cannot afford to do so in comfort, according to a study made by T. Fahey and H. Russell for the Economic and Social Research Institute.

According to Teng Alday, Insurance Director for Citicorp Financial Services and Insurance Brokerage Philippines, Inc. (CFSI), Citi’s insurance and investments arm in the country: “At age 60 or 65, men and women are eligible to retire after decades of toiling at work every day. However, most of them have no choice but to continue working since they have to earn income to finance their cost of living.”

Although Filipino culture calls for family support — which may include adult children helping out their parents financially — this is not carved in stone. In fact, a lot of adult children find themselves unable to extend financial help to their parents since they are also faced with their own financial needs as they bring up their families.

The choice boils down to: work or save. Working beyond age 65 is possible, although employment chances are almost nil then. Body aches and pains as a result of aging may also limit job options. The better option is to save up for retirement so one can live on those savings in the future. But this has to be done early.

The right financial plan

There are many ways to save up for retirement.

 “If your company has a retirement plan where both you and your employer contribute a set amount regularly, take advantage of this benefit. Your company will invest this fund so it will earn a good yield, benefiting everyone,” explained Alday.

If your company does not offer a retirement plan, you’re pretty much on your own. Although you may get retirement benefits as pension from the SSS and GSIS, the amount is not enough to live on.

One other option is to invest in a retirement plan, or a pension fund. These are offered and managed by established financial institutions such as pre-need and insurance companies.

 Such a fund works like an insurance product: you are charged premiums over a specified number of years and you will be able to get a lump sum or regular payouts in the future.

There are a lot of such pension plans and retirement funds in the market today. Some of them even allow you to choose where your premiums will be invested so as to possibly give you even more returns in the future. Others offer a life and accident insurance benefit with the pension plan policy at no additional cost. Some others will even return all the premiums you have paid sometime in the future.

Choices, choices

With the variety of products plus the many options available in each, how does one make their choice?

That’s where CFSI comes in. Clients of its affiliate companies including Citibank, Citifinancial and Citibank Savings are able to learn about an array of insurance products, backed by several leading insurance companies, thru CFSI, who aids them by sharing information about how they can make their choice.

“Our clients appreciate the convenience that we offer — we can take them through not just the insurance options available, but also the different products in each of these options. When they do make their selection, they feel that they have arrived at the best possible option,” added Alday.

Indeed, by tapping CFSI, you will only deal with one person and at a glance, you can immediately compare pension plans and retirement plans suited for you.

You will also be helped in determining how much retirement fund you need to have to maintain the lifestyle you desire. Some people just think a million pesos is what they need at the time they retire. However, you may be surprised to know that this may not be enough 30 years from now given the rate of inflation and adjustment in your desired lifestyle.

Start early

As the saying goes, “The early bird catches the worm.” If you start saving for your retirement early, you will reap a greater harvest in the future. That’s because your retirement fund, if let alone, will earn interest on top of earned interest (the concept of compound interest), thus snowballing your fund into a bigger amount in the future.

By starting your retirement fund early, you’ll be able to retire in style at the age you want to someday.

For more information, call CFSI Customer Service at 423-6338 or 423-6399 and set up an appointment with a CFSI Insurance Specialist.