A Helpful Guide on Planning for Your Retirement in Your 20s, 30s, 40s, and 50s

Your career has different stages, each with its own actionable strategies you can take to further your retirement goals.

During the early stages of your career, especially in your 20s to 30s, time is your greatest asset. While starting on your retirement savings this early on may seem excessive, it’ll allow you to lay down a good foundation for your fund. You can start planning for your retirement in your 20s and 30s by doing the following:

• Start saving immediately. As soon as you get your first paycheck, allocate a portion of your monthly income to your retirement fund. Even small, consistent transfers will accumulate significantly over time. You can even set up an automated fund transfer to automatically send over a portion of your income to a different account.
• Understand the retirement plans your employer may offer. Some private employers offer retirement savings plans. Make sure you’re participating and contributing to these plans regularly so you can reap their benefits later on.
• Invest in growth-oriented assets. Consider investing in assets with a high potential for growth, like equities and mutual funds. Since you’re just starting out, you’ll have plenty of time to wait for your investments to grow. While these investment options may come with risks, they may also offer higher returns.
• Consider Variable Universal Life insurance. Another tool to build retirement savings is getting a  Variable Universal Life (VUL) insurance. It is a permanent life insurance plan that allows the holder to invest their cash value in the market. While this insurance plan carries risks, it does offer a high potential for growth, giving you the possibility of earning more life insurance savings for your retirement.
• Establish an emergency fund. Don’t forget to build an emergency fund that covers at least three to six months of your estimated expenses. The purpose of an emergency fund is to safeguard against unforeseen events like sudden layoffs, emergency medical procedures, and unexpected damages to your home or vehicle.

In your 40s or 50s, you can be considered in your mid-career phase already. As you progress through your career path, your income typically grows as your career progress, giving you an opportunity to further increase your retirement savings. Mid-career planning should focus on boosting your savings and diversifying investments. Here are a few things you can consider when planning for retirement in your 40s to 50s:

• Increase your contributions. At this stage, your income will most likely be higher than when you were just starting out. With that, you should consider allocating a higher portion of it for your retirement.
• Diversify your investments. Balance out your investments across various assets to help minimize the risk. Consider a mix of different equities, bonds, and real estate to achieve a stable and growing portfolio without jeopardizing your financial security.
• Review and adjust your financial goals. Reevaluate your retirement goals and ensure that your savings and investment assets are aligned with the lifestyle you want to achieve.
• Prepare for healthcare expenses. Set aside funds for anticipated medical costs. Better yet, invest in health, in-care, or life insurance plans to be better prepared to handle the cost of healthcare in retirement.

As your retirement years approach, your focus should be on preserving your accumulated wealth. This phase is known as pre-retirement planning, and here's how you can prepare:

• Move on to stable investments. Late-career retirement planning should focus on keeping your assets from market fluctuations. Gradually move your portfolio to safer investments like bonds or time deposits.
• Create a retirement income plan. Whether you wish to consult a professional or do it yourself, you should determine how to convert your savings and investments into a steady income stream that matches the retirement lifestyle you want.
• Understand social security benefits and your pension. Ensure that you are familiar with the benefits provided by the Social Security System (SSS) and any private pension plans you may have. Use this knowledge to integrate these benefits into your overall retirement income.
• Consider healthcare and long-term care. Health problems that come with age often result in significant expenses during retirement. Ensure that you have adequate health insurance and plan for potential long-term care to lessen the burden of those costs.

Retirement planning is a long process that requires careful financial planning throughout your entire career. Allianz PNB Life provides comprehensive insurance plans that are tailored to your career phase, whether you’re just starting off, advancing in your career, or nearing retirement. Work with us, and we’ll help you build a solid financial foundation for your golden years.