Importance of Retirement Planning
We will discuss how Retirement Planning should become one of your priorities when you start working. This will help you realize why planning your retirement is crucial for you!
Retirement Planning Benefits
“Retirement is …. a time to experience a fulfilling life derived from many enjoyable and rewarding activities.”
—Ernie J. Zelinski, The Joy of Not Working
Retirement Planning is not something that people prioritize. They do not prepare themselves for when they retire. Though people were required to apply in SSS for pension, they normally do not venture out beyond that. They think it is enough to supply them in their retirement stage.What is more concerning is that some people even treat their children as their “retirement plan” which is unfair to them. They have their own retirement planning and putting your retirement burden to them will only cost them their financial stability.
So ask yourself. Am I this person? If the answer is yes, then good for you! If not then there is still time to change your mind. This chapter will help you enlighten yourself on why you should prioritize your retirement and what you will gain when you plan your retirement properly.
Rise of Average Life Expectancy
As we progress on innovation in medicine, technology, and lifestyles, our percentage of living beyond past Life Expectancy increases. When you live longer, it means that you need to have more money to continue living comfortably. When you retire, your sole source of income is from your retirement funds. You will lose your active source of income, and only will rely on your passive income that you built during your early years of working.
This means that you are more likely to live longer compared to your ancestors and living longer means you need more cash to sustain your lifestyle. You cannot amass this amount of money through your typical savings. Your main income cannot sustain your retirement fund alone. And mind you, you cannot work forever!
Your Body is Fragile
As you age, your body becomes more susceptible to diseases and illnesses—rendering your body practically useless. Though we have more advanced medicine, we cannot ignore the fact that there is always a disease that is lurking behind the shadows, biding its time to ensnare your fragile body—making you incapable of working until you drop dead.
In short, you cannot work forever! You need to invest in your retirement funds so when the day that your body cannot support itself to work, you will have enough money to provide yourself a comfortable living even if you retire.
You Cannot Depend on Your Family When You Retired
It is unfair to them to support you when you retire because they also must prepare for themselves when their retirement comes. Their finances will suffer, and the burden will be also passed down to their children. It is not their responsibility to take care of you when you retire. They have their own obligations to their own families. Not to mention they also need to prepare for their retirement.
Don’t be a financial burden to your family, prepare for your retirement and maybe you can even help them financially even when you retire. And if you plan your retirement properly, you might even have the capacity to help them if you want without worrying whether you have enough money or not.
Protection Against Inflation
Inflation is the continuous rise of prices of goods and services. No one can stop inflation. Comparing the prices of goods and services today and the last ten years, you will notice that the price of goods and services have significant differences. You have no way of preventing these increases, it is continuously prevailing.
What you can do is to protect yourself from the effects of inflation. When you do not plan for your retirement, what you currently earn will not be able to catch up with the inflation. This is because money that is not invested in any way, its value will only decrease as the inflation goes up. But when you plan your retirement and invest your money in a retirement fund, your money will grow along with the inflation because of its earnings and appreciation of the investment product you invested in.
Protection Against Emergency
Emergency situations are very sticky situations. They appear out of nowhere, leaving you stunned because of its unpredictability. No one knows what tomorrow may bring, only you can speculate. Emergencies may come into different forms, but the most devastating emergency of all is a medical emergency. Medical emergency is an emergency that may result in your permanent health damage, and on top of it are very expensive medical bills that may leave you penniless if you are not prepared.
This is where retirement planning comes in. When you have retirement funds, these emergencies will not leave you financially unstable and unsecured. It will help you fund your emergency bills that are very much expensive, especially the hospital bills. Your retirement plan will help you rebuild your finances and will safeguard your future even if you lose your job because of the emergency that you may encounter in the future.
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