3 Steps Towards A Prosperous Retirement

Ngopisantuy.com 3 Steps Towards A Prosperous Retirement, The phrase “sandwich generation” is now often used to characterize those who are responsible for the generations above and below them. During their productive phase, they must shoulder the living expenditures of both their parents and their children.

Do you want your darling children and grandkids to face the same fate as you? One strategy to stop the cycle is to start planning for retirement as soon as feasible and as thoroughly as possible.

It’s normal that those of you who are married but are still far from retirement age haven’t given much consideration to how to plan for your old age.

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3 Steps Towards A Prosperous Retirement

But don’t wait till the kids are grownups and living with their family. If you do not make plans at this point, your next generation, as well as the sandwich generation, may be imprisoned.

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Calculating Retirement Fund Requirements

Furthermore, for yourself, retirement planning might provide essential benefits later on. According to the United States Psychological Association (APA), as many as 72% of individuals are concerned about their finances, which might be a psychological strain for you. Less mental strain, as well as less health concerns associated with old age.

However, the program’s funding are frequently insufficient, especially if you wish to leave a significant legacy for future generations. So, how much money should you save during your productive period?

For example, if you wish to retire at 55 and estimate an average Indonesian life expectancy of 75 years, you must plan for 20 years of living expenditures.

Assume you are 30 years old and require a monthly living expense of IDR 5 million, which means you must save IDR 60 million per year or IDR 1.8 billion for the next 20 years, assuming no inflation.

If you use 5% inflation, the amount of IDR 60 million will be greater than IDR 500 million at the start of your retirement, assuming the same lifestyle. Isn’t that a significant figure?

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Begin saving and investing now

Because the quantity of retirement savings required is relatively big, it is preferable to begin saving while you are still productive. Even though 8% of pay has been set aside for JHT BPJS Employment and DPLK items, this amount is deemed insufficient to ensure old age in the future. It is preferable if you set away 15-20% of your whole income for retirement.

The suggested proportion coincides with the common 50/30/20 budgeting strategy, in which you divide your expenditure into 50% necessities, 30% desires, and 20% savings. As a result, you may use that strategy as a starting point and alter the specifics based on your present situation. Begin by eliminating needless costs and increasing savings.

Savings alone will not be enough to cover the costs. You should also have an investment. You should start investing early, with low-risk products such as government bonds or time deposits.

For example, investing begins at the age of 30 with a 12% income investment with a 10% annual return. If you earn IDR 20 million and save IDR 2.5 million in the Financial Institution Pension Fund (DPLK), you would receive IDR 3.1 billion when you retire.

If the money are then invested in bonds or deposits, you would get Rp16-22 million each month after retirement, which is similar to your present pay.

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Have Pension Fund Protection Insurance

Everyone desires a prosperous retirement with their cherished partner or family. However, keep in mind that every strategy involves dangers.

If a partner dies before retirement, the spouse who is left behind may forfeit the planned retirement cash. That is why it is critical to have insurance that can both grow and preserve your retirement money as you get older.

Manulife Indonesia offers old age security products such as MiFuture Income Protector (MiFIP). This plan offers Dana Mapan with assurance in old age and a guaranteed income every year up to 600% of Dana Mapan’s value.

Furthermore, MiFIP provides insurance against the risk of death and injury up to 100 percent of the Dana established. For further information, please contact our Life Planner right now.

Author: Irawan
I'm a regular contributor to IRAWAN commander, and in my business blog, my team and I share tales on the experience of starting a business from zero, how it feels to build a startup, and how to scale-up.

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