Top eight (8) reasons why you need to prepare more for retirement

You are currently employed, or you have a thriving business now and you are looking at retiring comfortably in the near or distant future. That period in the horizon, however, is not guaranteed as your circumstances may change instantly along the way.

It therefore pays to start building your retirement fund or supplement your existing one to ensure your financial security, independence, and peace of mind in those later years - the grandest vacation of your life.

Here are the top eight (8) reasons why you should be doubly preparing for retirement:

1. Protection Against Inflation

Inflation can diminish your purchasing power over time. Money that seems like a lot today may not be enough in the future due to inflation. By investing additional funds for retirement, you're putting your money into assets that can grow faster than inflation, helping you maintain your quality of life during retirement.

2. Quality of Life

Setting aside a part of your income for retirement gives you the freedom to live your golden years the way you want. Whether you want to travel, pursue hobbies, or live comfortably with financial freedom, preparing early and more is key to ensuring you a more secured retirement.

3. Financial Independence

Preparing for retirement means you’ll have the resources to support yourself when you no longer have regular income. Without savings or investments, you may have to rely on government programs like social security or family members for support, which may not be enough to maintain your standard of living.

4. Rising Healthcare Expenses

Healthcare costs tend to rise as you age, and they can be significant during retirement. By preparing early, you can create a more sizeable financial cushion to cover these costs, including premiums, prescriptions, and long-term care if needed.

5. Flexibility and More Life Choices

The more you save, the more money and flexibility you’ll have in retirement. With a solid financial foundation, you can choose to work part-time, start a new venture, travel, or spend more time with loved ones, without worrying about money.

6. No Financial Burden on Others

Proper retirement planning helps ensure that you will not become a financial burden on your children or other family members upon retirement. By building more retirement savings, you can reduce the potential need for others to support you in your later years.

7. Uncertainty of Social Security and Pension Systems

Pension benefits from Social Security System (SSS) or Government Service Insurance System (GSIS) may not provide enough income to support a comfortable retirement, and many pension plans are being reduced or phased out - or at risk of closure because of mismanagement. Relying solely on these institutions could leave you vulnerable to future changes in policy or funding. If you are going to be an SSS pensioner, your maximum monthly pension may only be about P17,000 which obviously is not enough to retire comfortably especially if you have maintenance medications to take care of.

8. Rising Life Expectancy

People nowadays are living longer, which means that retirement may last for 20–35 years or more. The longer you live, the more money you will need to cover expenses, including healthcare, housing, food, and leisure activities. Critical illnesses like cancers are also ailments of the old. As you advance in age, you become more vulnerable to these diseases and therefore need more money to cover potential medical expenses.

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In summary, extra careful and serious preparation for retirement is crucial for maintaining your financial well-being, independence, and peace of mind in retirement - which you well deserve after years of hard work. Starting early and being consistent in your saving and investing can make a significant difference in achieving a more comfortable and more secured retirement.