MANILA, Philippines – The golden rule when retiring, according to financial planner Efren Cruz, is: your money should outlast you and not the other way around.
But while some have enough retirement funds, others tend to neglect putting aside money for retirement.
Cruz said there are ways to still make money even when one is retired, including getting a job that may involve teaching or consulting.
Another is by investing in a business that does not involve high risks.
“Do not go into business unless it’s something you are familiar with or you may lose money,” Cruz told ANC’s “On The Money.”
Cruz said to prepare for retirement, you must first decide what age you will retire and then paint a picture of the type of lifestyle you want to have at that age.
Once the activities are planned, put a price tag on it and factor in the future the cost of these activities.
“Where you put your money is determined by what you need to earn and what you need to earn is determined by the picture of your retirement,” said Cruz.
He said also among the factors to consider when retiring is the amount of money you will need based on your family’s life expectancy.
Cruz also said to factor in inflation and consider hiring a financial planner to calculate the numbers.
He said that retirees with meager funds will have to rely on government insurance services, but noted that these services may not be enough for a decent lifestyle.
“They wouldn’t be sufficient to fund a decent retirement lifestyle because you really have to have savings to back it up,” he said.
Cruz added that teaming up with your children for an investment is also good way to help fund retirement.