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Common Mistakes in Retirement Planning

Common Mistakes in Retirement Planning

         Aside from the fact that many Filipinos are not that knowledgeable in their finances, there are those who continue to commit mistakes. It is important that you identify the things that you are doing incorrectly. And in order to move through the mistakes, acceptance is important. You need to accept the fact that you have committed mistakes and are now ready to do things correctly.

Mistake #1: Dependency on Family / Relatives

      It is very evident that in Filipino families, everyone is very close to each other. It is already part of the culture wherein family and relatives depend on each other. As a Filipino, it is very common to hear from your parents things like, “Anak pagtapos mo mag-aral ikaw na bahala sa amin ha.”, “Dapat mag anak ka para may mag-aalaga sayo pagtanda mo.” This is very common in Filipino households. It is not bad to ask help from your children or relatives. But the issue is, it is not good to solely depend on them. As a parent, you should not view your children as an investment. You decided to bring up a child, and with that the responsibility to raise them is with you. You cannot tell your children that it is their responsibility to take care of you when you grow old and retire just because you brought them up. Providing for your child is your responsibility as it was your decision to bear a child. 

    As a child, there is nothing wrong with giving back to your parents or family. When the time comes that you are already earning for yourself, it is not bad to reward your parents after they have raised you. But you also need to tell them that you are just merely helping and that they should not depend on you solely. And when you decide to also start your own family, you should also bear in mind that your children are not investments. It was your decision to have a child thus the responsibility to provide for them is yours. And to avoid being solely dependent on your children, make a choice now. Start planning your retirement.

Mistake #2: Age of Retirement

            Another common mistake that Filipinos commit is the mindset that when you talk about retirement, the time should be when you are already old with gray hair and already frail. There is nothing wrong with being enthusiastic with your work. When you are passionate about what you are doing, you will not feel easily tired and may want to work until you can do so. But there is a difference between working to fulfill your passion and working to provide for yourself and your family. It is understandable when you are just starting to work that you work to provide for your daily needs. But as the time goes by, you should be able to start and prepare for your retirement. The earlier you will prepare, the better. So that when you finally decide that you already want to retire, you are ready. And retiring does not necessarily mean that when you are already old. You can retire as early as you want as long as you are prepared for it. If you plan your retirement carefully, you can enjoy the fruits of your labor. That is why it is important to plan your retirement.

Mistake #3: Solely Depending on Government Pension / Company Pension

        It is good to have a government pension like coming from the Social Security System as well as a retirement package from your company. This would help in providing financial assistance to you when you retire. But this may not be enough especially when there are unforeseen circumstances. Something might happen that would require you to have a bigger financing. Your expected years of retirement could also become longer than what you have expected or prepared for. That is why it is important to look for other investments that could give you an additional passive income when you retire. And this comes up with carefully planning your retirement.

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