Sunday, January 25, 2015

Saving Up for Retirement (Part 3 of 3 in the Retirement Series)


If you were thinking of relying on your SSS or GSIS benefits to fund your expenses when you retire, then think again. The painful fact is that those government benefits are hardly enough to support anyone, much more if you want to retire in comfort. Currently, the maximum SSS pension is at Php13,000++. That's right, Php13,000. And that's if you paid the top tier of contributions throughout your entire employment history. What exactly can Php13,000 get you these days? Groceries and/or utilities?

GSIS benefits are much better though, since the pensioner will be getting his/her last basic pay for the rest of his/her life, and I think the benefits will even be extended to his/her survivor. My basic pay as a court attorney is just enough for our monthly expenses, but the wiggle room is so tiny that I have to allot and plan out the scheduled bonuses to cover the recurring expenses like insurance premiums and personal loans. Admittedly, if I retired now and all our debts were paid off, getting my last basic pay as my pension would be more than enough for our monthly expenses because we don't really live an extravagant lifestyle. But if I wanted to travel and splurge a little in retirement, then forget it, my basic pay won't suffice at all.

Monday, January 19, 2015

Predicting Retirement Expenses (Part 2 of 3 in the Retirement Series)

The rule of thumb when it comes to retirement savings is to replace 80% of your pre-retirement income for your golden years. Popular personal finance author Rose Fres Fausto also simplifies calculating retirement expenses into "annual expenses x number of years before you go to heaven." 

While it is true that your expenses will decrease to some extent in retirement, you will also find that you'll be spending extra on other items as well, so the 80% rule might not be accurate in all cases. On the other hand, although Rose Fausto's computation seems a bit cheeky, it pretty much encapsulates how retirement planning should be approached. If you spend x amount every year and intend to live 30 years after retiring from employment, then you should multiply your annual expenses by 30. Easy-peasy. Of course, this is very much simplified as it does not take inflation into account and seems to imply that that is all you will need. So again, approach with caution.

Friday, January 16, 2015

Visualizing Retirement (Part 1 of 3 in the Retirement Series)


When I think about retirement, I can't help but look towards my parents who have accomplished the "retire by the beach" scenario every person seems to aspire for. However, my parents are far from living the stereotypical sedentary, retired lifestyle because they're overseeing a beach resort in Biliran and with it comes the usual headaches of managing a group of people, ensuring that operations run smoothly (or frankly that they just run, period), balancing the books etc. I'm not exaggerating when I say that they're busier now than they were pre-retirement and that my mom probably misses the security of having a steady source of income. Anyway, the point is that they were able to successfully accomplish what they've been working for all of these years and for that, you have to give them credit.

Tuesday, January 13, 2015

Je Suis Human

My mother grew up in Ipil Zamboanga del Sur and became wary of Moslems for being violent, ill-educated and always out to make a quick buck at the expense of others. Naturally, that was how I saw Moslems too, until I met Wanie in law school, one of the kindest, smartest and most generous persons I'll ever have the privilege of knowing. And she happens to be Moslem.

Obviously I realized that Wanie wasn't one of "those" Moslems that my mother feared, and that for every one of her, there were hundreds and thousands more just like her who were far from the stereotype that had been fed to us for far too long. I was clearly the ignorant one for thinking that ALL Moslems were to be feared just because my mother's experience with a handful had not been positive.

Friday, January 9, 2015

Project 52 Revisited

The start of the year brings all sorts of resolutions, with financial resolutions such as saving more money most probably leading the pack, that's why the 52 week savings program is always trotted out around this time of the year. I started my own Project 52 sometime in August of 2013, but it became part of the collateral damage when we had to quickly come up with money to purchase the second condo unit. And truth be told, I didn't really mind because I had long abandoned it since I kept my money jar at the back of our closet to prevent tempting our househelp (I'm not accusing her of anything, but if a jar full of cash is within plain view then temptations will arise). Out of sight became out of mind and I eventually forgot about my savings program, and only remembered it when we were raising funds.

Now that I restarted on Project 52, I realized that there are two very basic rules that will help ensure its success.

Tuesday, January 6, 2015

2014 Fourth Quarter Net Worth Report


I've been itching to write this post but I had to wait until my VUL plan's cash surrender value (CSV) became available in Sun Link Online to complete my data. I was able to access my CSV yesterday so let's do this!