Michelle Hutchison
Stressed about having enough money to retire comfortably? You’re not alone. A recent survey found that in America, one in four people don’t believe they’ll ever be able to retire. With those kinds of figures floating around, it’s not hard to see that it’s a stress that affects many of us. But what’s the best way to prepare? And is it too late? (Hint: it’s never too late!)
So how should you calculate how much you need? The easiest way to think about it is how much you’d need to spend each week. From there, you can add up how much that would turn into over a 20-year period (from when you want to retire at about 65 years-old). A common number is between ₱6 million and ₱8 million, but it truly depends on your own lifestyle – everyone’s different!
Below, I’ve compiled my favorite tips for each generation on what to do when saving for a safe retirement.
Millennials
For those aged between 18 and 34, this is the simplest stage of your life to begin saving for retirement. It’s good to think about saving as soon as you leave university and start your career. It can be as easy as beginning to set aside a small amount every month, then adding to it as your career progresses. If you have a budget already, you can just add a little bit extra to your savings as a retirement fund.
Check with your job what they can offer you in terms of retirement funds. In Australia for instance, by law your employer has to pay 9.5 percent of your salary into a superannuation fund. In the U.S., on the other hand, they have retirement accounts like the 401(k), which allows you to invest pre-taxed money into it. Plus, a lot of companies offer to match your 401(k) savings 1:1. In the Philippines, some companies do offer retirement funds similar to that of the U.S., but you can also look into retirement accounts yourself. If this proves too daunting, you can look into getting advice from a financial expert.
Generation X
Gen X’ers are aged 35-54. If you’ve already started saving for retirement by now – fantastic! But you can always review your plan and make sure it’s up-to-date with what you’re earning. For example, if you get a promotion, you should give your retirement fund a promotion as well!
If you haven’t started saving, that’s also fine! There’s no time like the present to start looking into it, plus it’s quite common for people to begin thinking of their retirement savings in their late 30s.
Baby Boomers
At this time of your life – those aged 55+ – you should start checking your finances and making sure you’re not heading towards retirement with a hefty debt in tow. Data from the Federal Reserve Bank of New York found that the amount of student debt held by those older than 60 totaled an incredible USD66.7 billion in 2015. Heading into retirement with debt is no piece of cake, but there are several ways to get help. A good way to do this is to combine all your debts into one loan, which allows you to pay all your debt off to a single place, on a single rate.
Always remember, it’s never too late to start saving for retirement! Saving whatever amount you can will be a huge help as you near retiring age. So no matter which generation you belong to, start saving today.
