Business World
Financial consultants group urges Filipinos to give retirement planning more thought
Filipinos should save up for retirement as growing old entails a lot of costs and it is no longer feasible to depend on one's family for support in old age, an official of the Philippine unit of the International Association of Registered Financial Consultants (IARFC) said.
In an interview, group chairman Jeffrey Chiew, said that retirement planning should be a priority for Filipinos since people are now living longer and there is no mandatory retirement program in the country.
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He added that in general, Asians prepare more for their children's education than for their retirement.
"Retirement planning is only a myth in
Mr. Chiew said there are two phases of retirement: the "happy phase," and the "sad phase."
"Phase one is the happy phase, when one is from 60 years old to 80 years old. It's called happy phase because in phase one, an individual retires and he has more time to do more shopping, play more golf, and to travel," he said.
Meanwhile, the "sad phase" is when an individual goes beyond 80 years old, and is afflicted with illness, he said.
"It's going to be quite sad because your health will be affected and you will require long term care. Long term care can be very expensive," he said.
He said that individuals who go beyond 80 years old may need medical, nursing or custodial, intermediate, and geriatric care.
"The least that people should do is to save up some money for the retirement fund and to take care a little bit for their own long term care," he said.
He also said that for people to live comfortably when they retire, they need to have 80% of their final average income.
He added that the best time to start planning for retirement is 20 years before actually retiring.
And they should set aside 20% of their monthly salary, he said.
But for those who have "less time" to plan, Mr. Chiew said, it would be best to consult a financial planner who is trained to plan investments.
Mr. Chiew noted that retirement is not a function of age, but is rather a function of affordability.
"If at 70 years old I have no money for my meal, I still got to work. If you don't have the money, you cannot retire. If you have the money tomorrow, you can retire," he said.
He also said that another consideration for retirement is one's health.
"If your health is not good, you cannot work," he said.
Meanwhile, some people continue working for purposes other than money, he added.
"You do it because you love to do it, or that you help somebody, or because you enjoy doing your work. It's different than if you're doing your work to survive post 60," he said.
The IARFC is an international organization of financial professionals who aim to foster public confidence in the financial planning profession. The organization trains single- product and multi-product advisers to "convert" them into comprehensive financial planners. -- Jennee Grace U.
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