6 Tips for OFWs Who Want to Retire Early

Retirement means the time to relax, to enjoy, to be contented, to be carefree and to live the twilight years of your life in peace and harmony.  Needless to say, retirement is an important financial goal to consider, especially for those with the energy, the time and the money.

A study showed that retirement planning for Filipinos averagely starts at the age of 35, but you don’t have to wait to blow your 30th birthday candle or eat your 40th birthday cake only then to consider planning for your retirement.  Retirement doesn’t entirely mean a secure old-age future. Others find it best to retire as early. Retirement means doing what you want, when you want it with a secured financial life. To have that beautiful early retirement experience in the future, this is what you should be doing now.

1)     Open a bank account and save 10% of your gross income.

They say your age is your biggest advantage when it comes to preparing for retirement. So, it starts with having a bank account. This should be an account that you don't want to touch, much like your savings account. You can begin with saving 10% of your gross income for your retirement fund. Imagine the retirement fund you get for the next 35 years. This is just one method, you can always increase your percentage savings and get more in the end.

2) Convert savings to income.

In short, increase your earning potentials. You only get to live life once, so make the best out of it. A millionaire secret is to have multiple incomes. If a stable job is the only stream of income you got, you have to think rich by now. Invest in stock market, plan on a business venture or have a passive income stream. There’s nothing like enjoying retirement when you know you have secured income-generating resources to keep you afloat for the rest of your lifetime.

Note that in order to gain money, you will spend money first, so be wise and study before making investment decisions.

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3)  Minimize lifestyle expenses and avoid vices at all cost.

It takes discipline to get you the financial security you need. Filipinos have bad money habits that keep them from achieving their goals. Sometimes, they bring this attitude when they work abroad and end up committing overspending spree and getting vices such as casino gambling and impulse buying.

Imagine how 30% of your gross income is spent for wants and luxury, cut that percentage in half or more and deposit it to your savings or your retirement fund instead. Practice the “kurot” principle instead of the “dukot” principle. Save, invest and make more money. The next time you want a lavish lifestyle especially for your retirement, you have more budget than you can ever imagine.

4) Look for investment vehicles. 

Determine the growth rates of various investment fund baskets. A Bank Savings Account has 1% a year growth year, as for Bank Time Deposit, you get a 3% a year growth rate, while Retail Treasury Bond offers 5% a year growth rate and the Stock Market gives 12% or more a year growth rate only if invested for many years. Your other investment options are UITF, mutual fund, and VUL.

Instead of just parking your retirement fund, take the advantage to let interest rates work for you.  If you cannot understand the beauty of investment, then do not hesitate to ask the right people.

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5)  Allot money for insurance.

An insurance serves as a buffer for unwanted expenses such as hospitalization or a death of a family member. As you get old, health, medical and life insurance matter. It is best to start young while you are fit and healthy. There are available life insurances with long-term investments. By the time you want to pull out your investments, you already have a deserving retirement fund to enjoy with.

6) Have a bucket list of things you want to do.

Finally, have a bucket list of things you want to do. Much like your financial goals, this list will determine how much you want to earn to fulfill them. Create a vision board as this helps to activate the Law of Attraction. Be smart with your end-goals such as writing down the retirement fund you want to achieve. Then have it placed where you can see it every day to keep yourself motivated. Soon your dreams will become accomplished goals.

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If you think that planning on retirement is too early, think twice because retirement is a future activity.  The earlier you start, the more prepared you can be, the more flexible you can get. Start your dream big and stick to it. Change is constant and you can only adopt better if you are ready.

Author Bio:

Carol Soriano is a consultant for PawnHero.ph, the very first online pawnshop in the Philippines. A writer at heart and a social media enthusiast, she finds personal finance, investment and money matters interesting topics.

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