George S. Chua l August 18, 2022 l Manila Bulletin
We all know that it is inevitable that we will all have to leave this world and hopefully this happens many years after we have retired. While retirement will not be the same for everyone, there are certain norms by which one can be classified as a retiree such as leaving your normal job after reaching a certain age or years of service in the organization. For most people, retirement comes as you turn 60 and you would typically receive some lump sum amount from the company you worked for and a monthly pension from the SSS which is at best a modest amount that would be less than the minimum wage.
As a retiree, you may have more time on your hands but you will no longer have the strength and vitality of your youth, not have the income you could command when you were in your prime and have very limited options for employment. While it would be nice to think that your children who you raised, sent to school and are now gainfully employed will take care of you may not always happen for a number of reasons. Can you live off with what you have saved or invested in? Preparing for retirement is what we should all do. The earlier you can do this the better.
Here are some things you can do. You can save up and invest, put up your own business, or work part time. It is not enough to save money for your future. Whatever you save will get eaten up by inflation. Whatever you can save you should be able to invest it on something that will provide you with some kind or return and provide you with a capital appreciation. There are some listed blue chip stocks that you can consider that provide a cash dividend yield of more than the inflation rate and also give you a long term capital gain. Another asset class favorite of mine are rental properties that provide you monthly rental income plus property appreciation over time.
Putting up your own business is another option but it may not be for everyone. This is due to the commitment in time to run the business, the skills needed to run a successful enterprise and the challenges you may have to face. People who have a particular talent may be able to put this to good use in running their own business. Many people who like to cook and are good at it, have put up their own restaurants, pastry shops, bakeries and catering businesses. Other people who work with their hands such as carpenters, plumbers, masons and so on have become contractors who hire other people to work for them. The opportunities are endless and many people who have turned into entrepreneurship have found it rewarding and fulfilling.
Other retirees work part time to keep them busy and earn some income. Sitting in the boards of companies where you earn a per diem, doing consultancy work where you can charge fees, teaching or doing some other professional lectures where you are given an honorarium, is quite common. However, take note that your relevant work experience and academic qualifications are critical to be able to do this kind of work. Normally, you get invited to join in the board of companies. There are limited opportunities that people can apply for a job to be a member of the board of directors. The same is true in becoming a professor in a good school where you typically need to be referred by a faculty to be able to teach in the University.
Preparing for retirement should be viewed as a second chance to be able to do something you truly like doing and earn money at the same time! Not only will remaining active keep you physically and mentally fit but it will allow you to improve your finances. Having more money is always better than not having enough of it.
*** (The views and comments of the author are his own and not of the newspaper or FINEX. Dr. George S. Chua was 2016 FINEX President, an entrepreneur and also a professorial lecturer at the University of the Philippines, Diliman. Comments may be sent to gschua@up.edu.ph)