According to a popular Money Talk Show in the Philippines, ANC on the Money, most Filipinos see long-term as just 5 to 6 years. The truth is, long term should be at least 15 years.
There’s a lot to consider as you approach retirement. It’s a growing concern because not everyone is educated on how to prepare for retirement. If you are seriously considering early retirement, ask yourself if you can address the following “retirement concerns”:
- Not enough Savings for your Daily Expenses.
When you retire, you stop earning regular income like you used to. The reality is even if you retire, you don’t stop spending. Expenses are still there such as food, water, electricity, travel expenses, medicines, etc. Some people I know spent their retirement income on major house renovation; some even spent it on luxuries like buying a new car so they end up in debt.
If you retire early, your savings or even pension, if it applies to you, may not be enough to sustain your lifestyle, so you need to create a retirement fund that will account for your lifestyle.
- Many Unfinished Businesses.
“Travel pa more” (travel extensively). House Renovation. New car. College Funding. Debt-Free life. And the list goes on.
Ask yourself. When you retire, what happens to your bucket list? How will you fund it or will you just let your dreams fade away? Are you just content to let your dreams slip away when you still have a few good years left to enjoy life?
Have you saved enough so you can afford to retire early and tick off your bucket list one by one?
- Is your Health Insurance coverage enough?
In the Philippines, when you retire, you have to spend for yourself especially on your medical needs, if any (since the govt. Philhealth assistance may not be enough to cover for your health requirements). Worse, most HMO companies will not accept you anymore so you lose your HMO coverage when you retire. When this happens, you need to create a health fund that can address your medical expenses for regular check ups or worse, critical illness when it happens.
“When you retire, you only retire from your job, not your life.”
- You need to Finish your Estate Planning first.
When you retire, you should have finished your plans of leaving a legacy to your loved ones. To do this, you need to have a proper mindset and prepare.
Many early retirees are unprepared for this aspect. To some, this topic is taboo. To others, there’s the unspoken rule that everything will be taken care of anyway.
The reality is, do not be a burden to anyone because it is expensive to get sick and die. Talk to a Financial Planner. See a reliable Accountant. Consult a competent lawyer.
Before you approach retirement and enjoy it, this should be given of utmost importance.
- Boredom can kill you.
To enjoy your retirement, you need to find something to do. If you are not working, what are your options? Do you have a hobby? Are you a sports enthusiast? Whatever endeavor you end up with, you need money to spend on with whatever you’re doing.
And if you don’t have the money to do the things that you want to do, you will end up doing nothing. So when you are not busy, boredom sets in. You know what’s next, right? Just kidding.
Bottomline, when you retire, you only retire from your job, not your life.
If you are seriously considering early retirement, consider the practical reasons not to retire too soon.