5 reasons why you need to start planning for retirement early

When you think about your retirement, chances are that it is still a long way off – and this makes it easy to postpone setting up a plan of action. But by the time you reach the age of retirement, it may already be too late.

Taking steps early on can make your golden years more comfortable and enjoyable – not only for you but also for your loved ones.

Why is it important to save for retirement? There are a few key reasons why planning for retirement early is necessary.

The Importance of Saving for Retirement

Why is it important to begin saving for retirement while you are young? Here are reasons you should plan for retirement:

1. You have more time to save

One of the best things about starting your retirement planning early is that you have plenty of time to save up and use different means to grow your assets.

This means that you can afford to contribute smaller amounts to your savings account or insurance in the Philippines, rather than trying to save a large sum of money in a shorter amount of time. Over the years, your small savings will add up and you will be able to enjoy a more comfortable retirement.

Here are some examples of how much it can cost you if you start late.

A 25-year-old worker with a PHP 30,000 monthly salary would have to save 6% of his salary until retirement in order to be able to retire at the age of 60 with PHP 756,000 savings. If he doesn't start saving until he is 35, he has to contribute 8% of his salary every month to achieve the same target. If he doesn't start saving until he is 45, he has to set aside almost 14% of his monthly income.

2. You can take advantage of compound interest

Another reason why it is important to start saving for retirement early is that you can take advantage of compound interest. This means that the money you save will earn interest on top of the interest it has already earned, and this can help your savings to grow even more quickly.

Compound interest also applies to other investment products, such as the different types of investment insurance plans, which provide insurance benefits while growing your money.

3. You can reduce your stress levels

Many retirees are surprised that their savings are not enough to sustain their living expenses, and so struggle to make ends meet. So, instead of enjoying their retirement years, they end up with more stress than when they were working. This is why you should plan for retirement.

Starting to save up early for retirement can help ensure that you have enough to fall back on post-retirement.

However, a more effective way to reduce your stress levels is by investing in your financial stability through investment insurance. You can invest in financial products that offer protection and help grow your money. This is how investment insurance provides financial security – it helps grow your money as it offers financial protection for life’s uncertainties so you know you have a safeguard.

Knowing you have protection and additional income can help reduce stress now and in the future.

4. You can avoid debt

Often, a consequence of reduced income for retirees is debt. They may find themselves unable to fund unexpected expenses, such as car repairs or medical bills.

However, these challenges can be avoided altogether if you start saving and investing for retirement early on. You will have plenty of time to build up a savings cushion, which can not only help you cover emergency expenses but allow you to maintain your lifestyle during retirement. This is why investment-linked insurance is a must when it comes to retirement planning.

5. You can help your loved ones

Finally, one of the best reasons to start your retirement planning early is to secure a meaningful inheritance for your loved ones. If you prepare for retirement, you may not need to exhaust your savings and other assets. This means that your loved ones can still benefit from some of the money you have saved while ensuring that your own needs will be taken care of in your old age.

Start Preparing for Retirement Today

Saving for retirement may seem like a daunting task, but now that you know why it is important to save for retirement early, you take the necessary steps to make it easier on yourself. There are plenty of ways to save and grow your money so you can live comfortably after retirement. So, start planning now and find the best strategy to prepare for retirement.

Talk to one of our Financial Advisors today so you can find a retirement insurance plan that works for you