7 Tips for Preparing Pension Funds Starting Now, Try it!
Wednesday, June 3, 2020
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Even though you're young, it doesn't mean you don't need to think about retirement funds. Preparing a pension fund is an important thing that should not be missed in a financial planning. Pension funds will prevent you from financial problems in the future, when you don't work anymore.
Here are some tips for preparing a retirement fund that you can do.
1. Consistently saving pension funds every month
Try setting aside at least 10 percent of your monthly income for pension funds. For example if you have a salary of USD 500 per month, then you can save an amount of USD 50 every month. When your salary rises with career advancement, for example to USD 700 per month, the amount of money you save becomes USD 70.
Although the nominal may not be too big, but if you do it consistently until retirement age, over time your savings will be a lot.
2. Following the pension fund preparation program from a trusted bank or financial institution
When preparing a pension fund, commitment and consistency to save are needed. You must be disciplined to set aside income every month. For some people, this is not easy.
To work around this, you can follow a pension fund preparation program organized by a bank or a trusted financial institution. These programs will automatically withdraw pension funds every month from your account, so that inevitably you will be disciplined to save.
3. Prepare as early as possible
Don't forget to prepare the pension fund as early as possible. Do not until you delay putting pension funds into your financial plan. Once you have your own income, immediately prepare your retirement funds. The earlier you prepare it, the better.
As an illustration, you save USD 70 per month for retirement plans at the age of 65 years. If you start setting aside this money from the age of 22, then at the age of 65, you will have USD 36,120 to retire.
Compare if you just started saving pension funds at the age of 32 years, with the same amount each year. At 65 years old, you will have USD 27,720 to retire. The difference is quite far, isn't it?
4. Separate pension funds with other funds
As the name implies, you can only use pension funds for retirement purposes later. So, you can't use these funds now. Pension funds are also different from ordinary savings or emergency funds.
So that your retirement funds are safe, try to separate these funds from other funds such as living funds and emergency funds. If necessary, you can create a special bank account to save pension funds.
5. Looking for a side job for additional savings
Basically, the more nominal money you save as a retirement fund, the better. For you who currently work as an employee, it doesn't hurt to look for additional income outside the office.
While currently still productive, you can save this extra income as a pension fund later. There are many side jobs that you can choose from and don't take up too much time, like selling online, becoming a tutor, and so on.
If necessary, try to find a job that can still make money even though you are sleeping. For example, being a blogger or content writer on platforms such as the IDN Times Community where you will earn money every time someone reads your writing.
6. Saving these savings funds as an investment
Pension fund is basically intended for you when you are not productive or unable to work again in old age. Therefore, there is no harm in increasing the value of your savings by investing. With investment, you can get passive income without having to work.
Investing your savings can be the right choice than just saving it in a bank account. Because your retirement funds are still used for a long time, you can choose the type of long-term investment.
To be safe, choose investment instruments that are stable and long-term. Do not be tempted to choose the type of investment that promises high returns in the short term.
7. Not dependent on company pension fund guarantees
For those of you who work as employees, companies or institutions where you work usually have a pension fund guarantee for their employees. But, do not let you depend on the pension fund. Try to keep preparing your own pension fund.
Pension funds from companies generally have certain value limits that may not be sufficient to meet your needs when you retire later. In addition, there may be unexpected things, such as bankruptcy, layoffs before retirement, and so on.