Can I afford to save for my retirement during the pandemic?

Can I afford to save for my retirement during the pandemic?
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While money doesn’t officially buy happiness, it does give you freedom when it comes to taking risks and growing your career.

Having the right money mindset also gives you a sense of control and confidence, especially in this world of COVID-19. That confidence will give you stability, which reduces stress and keeps you feeling well.

One rule of sticking to your financial goals is staying motivated. Thus, surrounding yourself with the right influences can push you to success.

And when we talk about the right influences, Ton Patron is back with us again to share his advocacy of repairing what he calls the “sandwich generation.”

“Sandwich generation” is a term for working Filipinos who are caught between obligations of taking care of their aging parents while providing support for their growing children. Generally, this generation isn’t able to elevate their way of life because of this responsibility.

Our recent survey reveals that most of Uploan’s borrowers have four or more dependents. With COVID-19’s impact on the economy and the surge in unemployment rates, we project an additional two dependents (at least) per employee.

Understanding the basics of personal finance 

In this episode, Ton and I discuss life insurance, health insurance, and retirement planning as essential steps to living according to your preferences rather than your needs in the sunset of your life.

For example, SSS benefits are more or less capped at PHP15,000 per month, while PhilHealth coverage stops once contributions from your salary halted. Retirement expenses may be larger than you currently anticipate.

“Treat your investment as an expense that you’re using now to buy your future,” Ton advises.  Even if you can’t hold a savings plan in your hands or eat it for dinner, the benefits of saving and investing your extra money should be clear.

Now ask yourself: How much disposable income does the entire household have? That’s the amount you want to allocate to your financial goals—including retirement. Ideally, we want to change the equation from “income minus expenses equals savings” to “income minus savings equals expenses.”

The best time to start is with your first paycheck, but you could build a healthy fund for retirement over a 20-year period. Once you have that discipline of putting some money aside every month, you can manage your investments with a glide path.

A glide path is a financial advisor lingo for reallocating your total funds into safer instruments every five years. As you reach closer to the end of your timeline (or when you want to use the money), your investments should become less aggressive.

It is also important to treat your investment as a monthly expense that you use to buy your future. But right now, you don’t have to pressure yourself into investing. If you don’t think that it’s safe, then don’t do it yet.

But if you do decide to invest, Ton suggests investing in mutual funds even during difficult times. So ask your bank about it because some providers allow you to start for as little as PHP1,000 per month.

About the guest: Ton Patron works as a Personal Finance adviser with almost two decades of experience in the financial industry in the Philippines. He works closely with the Securities and Exchange Commission (SEC) and Bangko Sentral ng Pilipinas (BSP) in creating a whole new way for consumers to purchase mutual funds online. 


Written by: Jenn Simons-Castillo  
Published on: September 09, 2020

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