Why Plan For Retirement When You Only Live Once (YOLO)?

This content is sponsored by Manulife Philippines.

Life can be stressful, which is why rewarding ourselves from time to time is crucial for our overall well-being. Often, we indulge in travel, dining experiences, concerts, gadgets, and the like, motivated by the “YOLO” (you only live once) mindset. The experience may be cool today, but it may not be worth it if it means overspending and drowning in debt tomorrow.

For Filipinos, who live for an average of 72 years, that is a long time. So, while it is important to enjoy life now, it is equally crucial to think about your future.

If you want to continue living the way you currently do right now, have you considered how you’ll be able to maintain your current lifestyle? Thinking about when you’d like to retire and the kind of retirement you’d like to have will help you determine how much you’d need to save. And don’t forget to factor in inflation, the economic state, and unexpected expenses such as home renovations and health emergencies.

After factoring in all these expenses, you’ll realize that relying solely on savings and pension funds may not be enough to sustain you during retirement.

Retirement is real, and you need to plan for it

Many Filipinos postpone retirement planning until later, as it often feels like a distant reality. Unfortunately, this delay can have significant consequences.

A 2023 study conducted by global insurance company Manulife found that only about 55% of Filipinos save for retirement. Among them, just one-third have a proper retirement plan. They mostly rely on social security, pensions, inheritance, or even financial support from loved ones, which might not be enough for a comfortable future, especially with potential health issues in later years.

To know what you need to plan for, ask yourself these questions:

1. When do you plan to retire? (At a normal retirement age or do you plan to retire early?)
2. What kind of lifestyle do you plan to have? (Lavish or simple?)
3. What sources of income will you have during retirement? (Savings, pension, investments, etc.)?
4. What other financial factors or obligations should you plan for? (Debt, medical, inflation, etc.)?

It is also important to set aside money for fun stuff such as hobbies or even travelling, because these activities can enhance your quality of life and shouldn’t stop when you retire.

Make a plan and make it now

So, when is the best time to plan your retirement? The answer is simple: ASAP.

Just like building wealth and achieving financial independence, planning for retirement is most effective when you start young. How much you need to set up for your retirement savings is entirely up to you. Just keep in mind that the earlier you start, the easier it is to fund your future adventures – thanks to the power of compound interest.

Imagine a snowball. Compound interest is that snowball rolling downhill. It starts small, but as it picks up speed, over time, it grows bigger and bigger.

Usually, you only earn interest on your initial savings. But with compounding interest, you also earn interest on the interest you’ve already made. This makes your money grow much faster as time passes.

For example, if you save PHP40,000 a year (about PHP 3,333/month) at age 25 in a retirement fund that grows by 8% annually, by age 60, you would have saved PHP 6.2 million.

As you can see, starting earlier allows you to accumulate more savings.

Grow your wealth with emergencies in mind

Unforeseen events like accidents and medical issues can strain your finances. Relying solely on your savings account to cover these expenses may deplete your funds and mess up your retirement plans.

While HMOs and government-sponsored health plans offer valuable protection, their coverage often has limitations. Major medical emergencies can incur significant costs exceeding these plans’ limits. That’s why securing insurance plans specifically designed for such situations is highly recommended.

The good news is you can get the protection you need while diversifying your wealth. Some insurance plans let you invest your money and get life insurance at the same time. It’s like a double win: you can grow your money in the market and rest easy knowing you and your loved ones are protected.

Plan Now, YOLO Later

Building your retirement fund prepares you for any curveballs that are thrown your way. Remember that your future self counts on you to make smart choices today.

Many institutions such as Manulife Philippines offer consultations with Financial Advisors who can assist you in planning for your retirement. With their vast knowledge and proven industry experience, these advisors can provide guidance on investment opportunities that fit your needs, potentially accelerating the growth of your wealth, compared to if you were managing it on your own.

So, before you splurge on a trip, a luxury bag, or a concert, think twice. Create a plan, build your wealth wisely, and prioritize your health. This way, you save smarter, live better, and retire ready. Trust me, your future self will give you a high five while chilling on the beach, YOLOing thanks to the smart financial choices you make today!

This article is a collaboration with The Manufacturers Life Insurance Co. (Phils.), Inc., also known as Manulife Philippines, a subsidiary of Manulife Financial Corporation – one of the world’s largest insurance companies. Headquartered in Canada, Manulife serves over 30 million customers globally, offering a diverse range of insurance, investment, wealth management, and financial planning services. Explore how Manulife can assist in securing your future by visiting www.manulife.com.ph.

Content sponsored by Manulife Philippines.

When someone thinks about YOLO, they often focus on living life to the fullest right now. But YOLO also means that you should think and plan for your retirement because living your best life doesn’t stop after you retire.

Having a retirement plan is crucial towards ensuring a financially comfortable lifestyle in the future. Manulife Philippines offers various solutions that can help you plan for your retirement. From retirement savings plans that help you make the most of the next stage of your life, to investments that give you payouts, each plan is catered to each individual.

As your life later depends on the plans you build today, start planning for your retirement today.