A Guide to Saving Up for Retiring OFWs

For many, retirement conjures up dreams of leisurely days by the beach, eternal vacations on a farm, or living an easy life in a rest house far away from the city. Unfortunately, reality breaks many of these dreams apart. The Bangko Sentral ng Pilipinas (BSP) found out that 3 out of 10 OFWs and their families can put funds in their savings. Everything else goes to either food consumption or personal items. 

While there are many OFW savings programs the Government offers to our fellow bagong bayanis, the country still has one of the worst retirement systems in the world. Government and corporate pension programs fall short of meeting pre- and post-employment financial demands. With this, financial planning for retirement rests with the employee. 

For all the bad news comes the good news. OFWs can now take other paths to save up before retirement comes. The first tip: If you are close to turning 30 or are 30, retirement planning should be on top of your list as soon as you get the chance to plan it. The longer you wait, the more days you push the planning back, the less time you will have to reach your retirement savings goals.  

A Quick Checklist for Retiring OFWs 

Understand your financial situation 

It’s critical to be aware of your financial situation when you make retirement plans. Remember that when you retire, you’ll probably live on a fixed income. Your assets, savings, obligations, and liabilities should all be in order because they have an impact on your funds for the rest of your life. 

Keep adding to your emergency fund 

You should take this action well before you reach retirement age. You can set aside money in an emergency fund to cover unforeseen expenses like job loss, disability, and other forms of emergencies. Building your emergency fund now, if you haven’t already, will function as your security net for money in your older years. 

Gradually pay off your obligations 

Debts are a reality for OFWs as well. Before they were sent overseas, some already had debt. Additionally, there are people who owe money to the organization that hired them. You need to pay off your bills so you may start saving for retirement. It would be great to pay off your debts while you are still employed because your income would likely decline once you retire. 

Protect yourself with health insurance 

The danger of getting ailments is higher for those in their retirement years. When you are no longer working as an OFW, some common serious ailments may attack. You may be sure that even if you don’t have a consistent income, your health will be taken care of with a health insurance plan. 

Be certain you have life insurance 

Life is unpredictable, and as the family’s primary provider, you want them to be safe even after you pass away. You can prevent financial issues that could develop in the event of illness or an early death by purchasing life insurance. You’ll have peace of mind knowing that no matter what life throws at you, you and your family will be able to survive. 

Stay informed with current OFW programs 

Numerous initiatives are available to assist OFWs in settling down permanently. For OFWs, the government offers a variety of support and programs. 

How to Fund Your Retirement Wisely 

• Start investing in mutual funds 

An investment fund is a fantastic, simple method to start investing if you don’t have the time to learn about the stock market. 

A skilled fund manager will conduct the necessary stock research, analysis, buying, and selling on your behalf when managing an investment fund. Diversification is a key component of an investment fund’s strength. Your fund manager minimizes risk to your money while maximizing the possibility for the fund to earn more because the fund is typically invested in dozens, sometimes even hundreds, of different stocks. 

• Consider real estate investment 

A good source of money in life is real estate. Renting out your vacant home or condo is a terrific method to boost your income if you own one of these structures. 

Keep in mind that land increases in value over time, particularly if it’s located in a desirable, accessible area. Therefore, you have the choice to sell your lot, move to a smaller home, and use the proceeds from the sale to fund your retirement when your children leave home and start their own families. 

• Take advantage of insurance 

Over time, insurance policies have evolved to provide more than just protection in the case of your demise or disability. Insurance is now used as a retirement income source. For instance, a variable universal life (VUL) insurance offers insurance protection while also assisting in the development of your savings. 

What You Must Consider Before Your Retirement 

What do I do 10 years before my retirement? 

Track your current expenditure while estimating your living expenses. Utilize this information to determine your projected retirement income needs and create a sensible budget, keeping inflation in mind. 

Calculate your retirement income by listing all your potential sources of income. Recall that retirement income will be determined by individual savings, employer retirement plans, and government benefits. 

Employer fund matching options should be fully taken advantage of if possible if your business offers a group RRSP or retirement plan. 

What do I do 5 years before my retirement? 

Review your investment portfolio and think about switching to more risk-averse or conservative options. 

Reconsider your lifestyle requirements and make a list of any modifications you might make once you retire. Travel, part-time employment, medical costs, or moving to a new home are a few things to think about. 

Have things changed since you last updated your estimate of living costs? 

Update your projected retirement income – Have your investments performed as anticipated? 

What do I do 1 year before my retirement? 

Check your eligibility for a corporate pension and your suggested annual income by getting in touch with the supplier of your employer’s retirement savings plan or your human resources office. 

Consider estate planning. Review your will, powers of attorney, and any investment and succession plans. 

Non-financial Tips to Have a Better Retirement 

Something that takes the place of the time you spend at work, such as mentoring, volunteering, or even part-time employment improves your self-esteem and gives you a reason to get out of bed in the morning. 

Foster relationships – Once you retire, you can lose some of your friends, so it’s critical to find new ones in your family, your neighbors, a social or service club, or your church. 

Maintaining your health may be the most crucial element of a successful retirement. It can lower your medical expenses and raise your standard of living in retirement. Plan how you’ll keep active and healthy after you retire. 

Invest in Cocolife Asset Management before your retirement! 

People often claim that whereas the smart person makes money work for them, the common person works for money. Once you have a sizeable sum saved, investigate investing in it to increase its value. 

How can you then help your retirement plans and savings catch up? To diversify your investments, try using various investment vehicles. Did you realize that some life insurance policies also include an investment element? You’re not only improving the growth potential of your money, but you’re also defending yourself against unforeseen events that may otherwise deplete your savings! 

Discover more about the flexible plans offered by Cocolife Asset Management to help you secure your finances and help your money grow. There is one that will undoubtedly suit your requirements and objectives.