I am turning 30 early next year; it’s now a few months to New Year. Nowadays, I keep reflecting on my retirement days and what I have done to sustain myself when my old age knocks in. I have heard of different retirement stories, how couples invested or saved in their 20s. I am working very hard to be among the successful people after-work life. We want relaxed retirement life, travel throughout the world, and get involved in charity activities.However, to achieve the dream, I need to sacrifice several things, especially my finances. My central financial investment pillar is the stocks market (bonds, equity shares). I venture into both long-term and short-term investments, thus diversifying my portfolio.
How I Planned to Save for Retirement
Besides the share market, my company offers a retirement scheme where 20% of my salary is directed to the retirement account. It’s assuring in case other plans fail; I have a backup plan. Lately, I learned about life insurance and emergency funds which I plan to start anytime soon. All these actions are to help secure a better life after my retirement. However, it’s different for my neighbor, who is turning 55 next month and retiring from his 35 years job at public office.
He tells me life has just started as he plans to start on his investment plans. Mr. Patel has been saving 75% of his salary in a saving scheme where the amount has gained interest. Based on a rough calculation, that is enough amount to sustain him through retirement. He still has the pension money from the EPF scheme, which has already matured. However, Mr. Patel wants to ensure he leaves everything settled when his time comes.
He plans to invest and leave a fortune to his three children and grandchildren. The property he already owns is not enough to pass on to his family. This was quite challenging for me; I thought retirement planning starts in the 20s or 30s. Here is a different view on investment plans from a retired public officer to help his generations. Sir Patel has a total of $ 600,000 in cash and other investment in the pension scheme. He divided the amount into four portions. Each portion was representing three children and his portion.
For better planning, Mr. Patel involved a financial planner in helping gauge the best investment field to direct the children portion. He wasn’t planning to offer the amount right away but to save on a project which will generate money in the future. The portions were directed to equity funds, bank account as an emergency fund, long-term investment (government bonds), and life insurance.
The life insurance covered his children; the funds had a considered maturity time frame. After which, the beneficiaries would benefit for a lifetime. Though Sir Patel had never ventured into the share market, his financial advisor has walked him through the market strategies. This has generated consistent income which he created three portfolios for his children. In each portfolio, he purchased the same securities to help get matching funds.
Today he can monitor all his financial investments using an online platform. The share market accounts are linked to the internet banking service for better money transfers. The life insurance policy is paid through an automated banking system to keep fluency until the maturity date. His pension money is always credited to his account, helping him through his daily needs.Opening share accounts for each child would ease the investment operations when he is no more. He ensures no tiring processes will occur when his children take over his property and finances.
Every year Mr. Patel shifts funds from his accounts to his children’s accounts. He ensures to have enough for his needs but creates more every day for his children and grandchildren. The savings and equity investments are long-term inheritances. It’s an excellent financial gift made intelligently.To avoid any family fights in the future, every child has their portfolios and share of property in their name. The life insurance is also funded under their name to help benefit the whole family. The majority of retirees invest during their working years. However, they spend the funds during the retirement years, leaving nothing for their heirs. Some also get caught up in financial crises when the funds dry up without any other source of income besides the pension funds.
Retirement years can also be utilized to create more wealth in the simple, relaxed mechanism. Mr. Patel is quite old now and not active, but he has left a fortune for his generations. My years have also advance am wise and won’t wait for retirement blindly. I will continue investing and creating different channels which can sustain my family and future children.