How much do you need for retirement?
November 7, 2007 1:45am CST
I was looking through past articles from the Philippines newspaper Inquirer (www.inquirer.net). I found this article from their Money Smarts blog. It's interesting and made me think a lot. Here's a section of the article (from http://inquirerbloggers.net/moneysmarts/2007/04/17/how-much-do-you-need-for-retirement/): "A simpler way is to look at your current gross income, then ask yourself how much income you would likely to have before retirement. Let's say you are earning PHP50,000 now and you have 20 years before retirement. Assuming that your salary will grow 5% per year until you are 65. You will earn PHP140,000 a month by the time you retire. That's around PHP1.7 million per year. A rule of thumb says you will likely need 70% to 80% of that per year to live comfortably when you retire. Multiply that by 25 and voila, that's the kind of nest egg you hopefully will not outlive." Based on that computation, I tried computing for my (& my husband)'s retirement fund... yaiks! big big big... and I was also thinking that by that time cost of living would be definitely higher... oh my...
7 Nov 07
It not fair how the cost of living just keeps going up. Here I think you need about 500,000 to live by the time you retire by 65. Assuming you have your own house and car. My husband and I haven't nearly enouhg in our account as we hoped. But we're still trying to buy a house!
7 Nov 07
*Sigh* Isn't it overwhelming how difficult it is for ordinary people like us to actually be able to reach goals like that? Especially when our country's economy is not enough to help sustain people's needs in terms of adequate salaries and fair taxation :( Thanks to personal finance articles like those, we at least are forewarned, and at the same time, encouraged that there is still hope if we strive harder to reach financial goals despite the seemingly insurmountable difficulties we're facing. BTW, you can also try to read MoneySense magazine (the first and only publication at the moment about personal finance in the Philippines) because it has so many practical tips and eye-opening advice. Money Smarts author, Ms. Salve Duplito, is a columnist there too. You know, I found it surprising to be reading about her blog in mylot today because I just interviewed her this morning for an article I'm doing for another magazine. What a coincidence! :)