Tomorrow is not Too Late to Start Planning for Retirement
Many people may see 'retirement' as something far off, but the truth is, good retirement planning should start today to build financial security for retirement life. Whether you want to live the life you’ve always dreamed of or enjoy a peaceful retirement, it’s possible. The earlier you start planning and calculating the necessary expenses for retirement, the better your chances of living a worry-free life.
- Why is retirement planning important?
- Start planning for retirement by checking your post-retirement income sources
- Small things you shouldn’t overlook: Tips for saving for retirement
Why is retirement planning important?
For salaried employees or many others who work hard every day, saving for retirement may seem like something too distant to worry about.
But in reality, preparing for life after retirement is crucial. On the day you no longer work, there will be no income or financial stability. Without proper retirement planning, long-term financial problems may arise.
By starting to plan for retirement, you will be able to accumulate assets and sufficient savings to live your life freely and happily after retirement without worrying about expenses. You won’t need to borrow from others or face financial risks in an uncertain future, such as rising living costs, medical expenses, or daily expenses, including economic uncertainty or wars that could affect your life.
Therefore, retirement planning ensures you have enough savings and are ready to handle unexpected situations confidently. We’ve summarized some useful tips for retirement planning below.
Start planning for retirement by checking your post-retirement income sources
As mentioned earlier, retirement planning is essential and should not be overlooked, as it ensures financial security in your post-retirement life. But before you start planning for retirement, the first step is to check where your retirement income will come from, so you can evaluate and plan your expenses accordingly.
Annuities
- Lump-sum annuity: A lump sum received upon retirement from a government or private sector job.
- Monthly annuities: A monthly payment received for life or a set period from provident funds or social security.
Savings
- Bank savings: Money saved in various financial accounts.
- Retirement Mutual Fund (RMF): A long-term saving option with tax benefits that allows you to withdraw funds for use during retirement.
- Mutual funds: Money invested in various mutual funds such as stock mutual funds or bond funds.
- Assets: Real estate, stocks, cars, or gold that can be sold for capital.
- Annuity Insurance : For annuity insurance, you’ll receive regular payments according to the policy. A notable benefit is that annuity insurance premiums are tax, up to 300,000 Baht.
Other income
- Rental income: If you own property or vehicles for rent.
- Interest: Interest earned from savings or investments.
- Freelance work: If you continue to work or run an online business during retirement.
- Senior citizen allowance: A government allowance for seniors who meet the requirements.
Once you know where the retirement income come from, you can use this information to start planning efficiently for the expenses that will arise and are necessary after retirement, such as:
- Medical expenses: As you get older, illnesses may occur. Therefore, having good health insurance or savings set aside for medical expenses is essential.
- Food expenses: Food costs may increase as the body requires more nutritious meals, or you may have specific health conditions that require dietary control.
- Housing expenses: Including utilities, home repairs, or possibly adjusting your residence for retirement, such as moving to a larger house, a condominium with full amenities, or even a nursing home
- Family-related expenses: Even after retirement, you might still need to care for family members, such as a spouse or even support children or grandchildren with education or other costs. It's essential to plan and set aside money for this.
- Travel expenses: Whether for errands, travel, or visiting relatives, you'll need to prepare funds for transportation and other travel-related costs.
- Personal care expenses: Paying for caregivers or utilizing elderly care services, for example.
- Emergency expenses: You should have savings for unexpected situations, such as accidents, car repairs, or urgent financial needs. Having an emergency fund plan will help you handle these with peace of mind.
Additionally, another factor influencing post-retirement expenses includes lifestyle choices, habits, and personal preferences, such as a love for travel, food, collecting items, or hobbies. Even health plays a role, as a lack of careful living or frequent illness can gradually deplete your retirement savings.
Small things you shouldn’t overlook: Tips for saving for retirement
Simple tips that will help you save for retirement effectively: Even if you don’t save much, maintaining discipline and consistency can turn your savings into a substantial amount, providing financial security for your retirement life.
Retirement savings tips
- Start at a young age: The sooner you start saving, the more your money will grow due to compound interest.
- Invest: Use your savings to invest in various assets like stocks or mutual funds to make your money work and grow.
- Take advantage of tax benefits: For example, investing in RMF or LTF to reduce your taxes.
- Increase income: Look for ways to increase income, such as doing extra work, selling online, or renting out property.
- Cut unnecessary expenses: Review your daily spending and find ways to reduce unnecessary costs.
- Build saving discipline: Set a specific day and amount to save regularly and stick to it.
- Avoid unnecessary debt: Reduce or avoid unnecessary debt to save more and have enough money to spend during retirement without worries.
Lastly, without proper retirement planning, your future may not be as comfortable as you would hope. You may find yourself without enough money, needing to work, or selling off assets to support yourself. Don’t forget that post-retirement, you won’t be as physically agile or capable, and health issues may come into play, impacting your savings. So, the sooner you realize and prepare, the happier your retirement life will be.
Another option: Annuity insurance is a retirement planning method that offers both future financial security and attractive tax benefits.
Choose the annuity insurance from Muang Thai Life Assurance, Flexi Retire 90
Benefit 1: Receive up to 24% annuity annually (choose to receive annuity starting from age 55)
Benefit 2: Tax deduction up to 300,000 Baht
✔ Choose to receive your annuity monthly or annually.
✔ Receive annuity every year, up to 24% annually*, until age 90.
✔ Adjust the starting age for receiving your annuity once you've completed 5 years of premium payments.
🔥Buy today! Enjoy 0% interest installment payments for customers purchasing new policies in annual premium payment mode only, with participating credit cards.
For more information:
☑ Call Tel. 1766, available 24/7.
☑ Contact life insurance agent or Kasikornbank and Land and Houses Bank branches.
*The benefit is in % of the initial sum insured.
- Underwriting is subject to the Company’s rules.
- Conditions are as specified by Muang Thai Life Assurance PCL and the banks.
- Premium is eligible for tax deduction. Conditions are as specified by the Revenue Department.
- For annuity insurance, tax deductions can be up to 300,000 Baht. Ordinary life insurance premium deductions should be used first. If there is no ordinary life insurance premium or the premium is below 100,000 Baht, the annuity premium can be fully deducted up to 100,000 Baht, with the remaining premium eligible for a deduction of up to 15% of income, but not exceeding 200,000 Baht.
- Please study the details of coverage, conditions and exclusions before making a decision to purchase insurance.
Source: data retrieved on 13/09/2024
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