I believe that nobody wants to burden their children or family, if they have, when they are getting old and cannot make money anymore, and I also believe that everybody want to have their enjoyable retirement without any worry about their financial life. So, if we now having sufficient active income to cover all monthly household budget and can set aside a part of them into saving, lets calculate the amount to be saved for our retirement age. After calculation, its good if we can fulfill our monthly saving for this purpose, but we have to make efforts to save less amount even though by calculation we find out that too much money have to be saved for financial-free retirement.

Let say our calculation resulted $500 monthly saving, but from our current monthly income, seems that we will only be able to save $100 for our retirement. Don’t let this $100 cancel our intention to the retirement, but just easily start with $100. It will be better instead of surrender then we don’t even do any saving and all will be disappear.

Since saving purpose for retirement age is long-term habit we have to do, the handling of this money a little bit differs from other purpose. I try to give some clues how to handle this kind of saving :

1. Just start with choose well reputable bank with long experiences as a place to save our money, even though they offer lower interest rate. During uncertain long-term economic situation, a lot of small to medium bank will face difficulties once upon a time, and I think we don’t expect to get into hurry, queued at bank’s teller with other thousand of people, just to get our money back. Long established big reputable banks usually have passed several similar time, and time has proved their ability to overcome hard situation.
2. If we have found the bank, open one saving account under our name. This will become a special and particular saving account for retirement purpose, separated from others. Don’t to apply for any ATM card which can make us to withdraw the money easily, but just keep the saving book. Save our $100 every month, then forget our money as if we don’t have any saving at all !
3. Do similar thing every month at the beginning of the month (remember, don’t do it at the end of the month or we will oftenly find that we have nothing to save). If in the future the amount of money we can save is increased (let say become $150), then increase our saving amount, and also forget it for long period.
4. Slow but sure, we will have significant amount of forgotten money, and bank pays some interest to us. After several years, let check our saving balance and judge whether the amount already sufficient to be converted to time deposit or not. If the amount is sufficient, then convert them to time deposit with monthly roll over (please use monthly roll over instead of semester of yearly roll over, even though under lower interest rate).
5. We will have one time deposit certificate and one saving book then. Nicely forget our certificate, by place it in our safety box. Start again to save in our saving account from zero balance amount.
6. Please do it as a habit instead of an obligation for us. Do it for years with discipline, increase monthly saving amount step by step. After more than 10 years, we will have several certificates and one saving book.
7. If the amount already quite huge, and I expect our age already 45 or 50 years, try to find one good mutual fund, fix income mutual fund is better, and invest our money amount. Let the fund manager manage our money, and just forget it for 10 years. Meanwhile, keep continue our habit to save any amount in our saving account, still; convert them into time deposit when the amount already sufficient.
8. At the beginning of our pension age, we will have one saving account, several certificates of time deposit, and also mutual fund certificate. It’s a time to use them for our remained whole life. Post them all back to our saving account, and I believe we already had significant money amount for enjoyable retirement age.

This kind of scheme shall be implemented in flexible ways, and for sure we will need financial calculator to review time by time how many amount we have to set aside for securing our pension age.

So, forget our money, and enjoy our retirement age then !

Tags: retirement, saving

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When we are talking about retirement, a lot of people especially young men will think that this issue doesn’t so important, or even never been in their mind, since we have to talk something far in the future. In nature, people like to live and think for today, instead of thinking about something unclear, moreover if the issue is 25 years ahead from now.

But, on the other hand, all financial advisor always ask us to think and make some personal finances planning for our retirement age. Why this topic is crucial as one of our financial mission ?

For us who still enjoy your 20th years period of our life, we may think that retirement planning is something that can wait. So many thing to do and to think such as social life, romance, entertainment, and other ways of enjoy the life. Then, there’s a time when we get old and start to think about our retirement. At that time, may be the planning is too late and we have to work very hard to achieve our goal.

So, how important is retirement planning for all of us actually?

Let’s find the broad and simple answer. Assume that we started our career at our 25 years of age, then how many years time we have before retired? Up to 55 years old, there will be 30 years. Yes, we have 30 years to prepare. After that, if we can live up to 75 years old, how much time we have to spend without any significant income but just continuous monthly expenditure ? 20 years.

It means, we have 30 years to secure our next 20 years life (2/3 of productive life period). To be emphasized here, 20 years is not a short time, and at that time we will need something to spend for our daily life.

So, begin our retirement planning on 40 years of age is little bit too late unless at that time we have quite huge income to allocate. But, who can grant that our 40 years age will become our financial golden age ?

If we now 25 years old, and have 30 years to prepare our another 20 years life, I think such 20 years is quite important and fair to be included in our life planning. Otherwise, we will burden our children or family when we get retired without sufficient amount of money to spend.

So, just keep invest our money when we are young. If we are still under 20 – 30 years period of our life, we can learn all investment instrument and don’t be scared to take some investment risk. When we are under 40 – 50 years period, please calm down and save conservatively. Just bear in mind, that we will have long 20 years road to walk when our body is too weak to work, our brain is too tired to think, and the most appropriate thing to do just to enjoy our life.

Personal finances is sacrifice something in our current life for our better future life. Just make it as a natural process, enjoy our today’s life but also make a plan for our future life, so we will be able to enjoy our whole lifetime. That’s a dream of every human being, isn’t it ?

So, once again, retirement planning is important just because we all want our whole life become enjoyable and valuable for us.

Tags: Investment, Personal Finance Management, retirement, savings

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