MoneySense Nov-Dec 2013 Excerpt, Editorial, and Table of Contents

Cover Story Excerpt:

The Chairman: Roberto de Ocampo Takes the Lead

De Ocampo is a veteran of many economic battles. He is best known and widely applauded for what he considers the most fulfilling time in his career as well as the most frustrating – that of being Finance Secretary. He explains, “As a Secretary of Finance, you are responsible for the direction of the economy. You make a wrong decision, many people suffer. So it is a very big responsibility and probably the one that has the widest range of responsibilities among all Cabinet posts. Other Departments would have a more specific program but with Finance, you’re the head of the Committee of Privatization, and head of the Committee of Government Owned and Controlled Corporations. Under you are the BIR, the Bureau of Customs, the Bureau of Treasury, the Insurance Commission, and the SEC. You are the representative of the country to the World Bank and so on. So I’ve got both domestic and international responsibilities. My decisions could thus affect millions of lives as well as the country’s relations with the global financial community.”

Retire Young and Retire Rich

Retirement. It is a concept that is almost universal. A goal for the majority, yet a goal that causes much anxiety–Have I saved enough? Will I live off my retirement fund? Can I afford future medical expenses? These are major questions one has in thinking about retirement.

But for an increasing number of people, retirement is not necessarily a thing to be put off in later years. It becomes a goal set earlier than the usual mandatory age of 60 or 65: to do the things that they want to do younger, to enjoy life more while they still have the strength, or to just rest earlier from a stressful empoyment life. “Usually, prospective early retirees see this age at forties to mid-forties,” said Registered Financial Planner and best-selling book author Alvin Tabañag. “But to retire early would be very challenging, as this would mean having saved up and have invested a huge amount of money,” he added.

Retirement Benefits 101

One of the considerations we make before signing an employment contract is the retirement benefit plan an employer offers. It is our hope that our employers will provide us with a generous retirement pay off that we can enjoy in our golden years as a sign of gratitude for our loyalty and long years of service. Many working Filipinos heavily rely on these benefits as their ticket to a comfortable retirement and understanding how they work is crucial in building a solid retirement plan…

World’s 10 Best Places to Retire

Where do you want to retire? If you’re thinking the Philippines, the US, Canada, or Australia, you’re not casting your net wide enough. What about Ecuador, Thailand, or Malta?

Of course, there are various factors to consider, depending on what matters most to you. But certainly, you would want to look at cost of living, climate, access to health care, variety of entertainment and recreation, real estate, and infrastructure. And you definitely want to consider the country’s requirements and benefits for foreign retirees.

Retirement Planning at 50

Retirement is a stage in life that many people look forward to. For those who have been saving and investing since the beginning of their career, this is a period where they finally reap all of their rewards. For some, this is the time of catching up with the world and family, going together on vacations and discovering what the world has to offer. For others, it’s an era of rest and relaxation without even thinking of work.

However, trouble could be brewing for those who came in a little bit too late in the saving field. Those in their fifties who didn’t plan in their earlier years may have this time for worry, for crunching – and for catching up.

According to Registered Financial Planner Alvin T. Tabanag, you shouldn’t delay your plans for retirement. “Do not depend on your government pension because this will not be enough,” he says. “Do not depend on your children, too. It is not fair to demand financial support from your children when you are no longer earning. They will have their own families and challenges to face.”

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Editor’s Note

The New Retirement

There was a time, not so long ago, when people worked until they turned 60 or 65, and then they were given a monthly pension or a lump sum retirement pay plus maybe a watch. Then they spent the rest of their lives on the golf course or playing with their grandkids. But not anymore.

The new retirement is no retirement. Starting with the Baby Boomers (our parents), it’s not uncommon for them to be still working in their 70s and even 80s. For one, life expectancy has increased such that people still have a good 20 to 30 years left. There is also the necessity of working longer because people have not saved enough for retirement (or their retirement package is just not enough to finance their lifestyle). And also, many senior citizens just enjoy working. The alternative is becoming mentally and physically passive, and then they die. Who wants that?

So if you have reached middle age or nearing retirement, how do you approach the new retirement? Here are some options:

1. Status Quo

Just keep doing what you’re doing. If you’re a business owner and love what you do, what is there to stop you from working until you can’t or don’t want to anymore? Of course, think of succession planning now but there is no need to give up what you love. If you’re a top executive doing a fantastic job, many companies will enforce mandatory retirement but let you keep you on as a consultant with most of the perks you have.

2. Down Shift

You can of course slow down a little by working part-time at your job or in your business. You continue to work and earn and yet you’ll have more time to pursue other interests. After all, there is more to life than your work.

3. Career Shift

You might decide to collect your retirement package and then shift to a totally different career. Maybe you’ve always wanted to become a photographer or a café owner. Now is the time to finally do what you’ve always dreamed of doing but never had the chance to do, until now.

4. Teach or Consult

A common approach for the newly retired is to teach at a college or become a consultant for other organizations. This is a great alternative if you want to pass on your hard-earned knowledge onto others.

5. Give Back

If you have been successful in your career and have saved for retirement, you may want to focus your expertise, experience, and resources on giving back to your local community or larger society. You can volunteer at your church or at non-profit organization. Or you can set up and run your own foundation.

6. Travel the World

If you have a substantial retirement kitty, why not enjoy life and travel around the world? This is the best time to reap the fruit of your hard-earned labor with your spouse, kids, and grandkids. Not only will you get to bond with your family (whom you may not have spent as much time with before when you were working), you’ll enrich your own life by being exposed to different cultures, trying new cuisines, and getting revived by fresh experiences.

7. Mix It Up

You can, of course, do a little of everything – do the same work, pursue a second career, teach others, give back, travel, and enjoy life.

So why devote an entire issue to retirement? Because even if you don’t plan to retire, you need to plan for retirement. What I mean is that you have to save and invest as much as you can so that when you’re in your 60s or even earlier, you will have accumulated enough wealth that you’ll have the freedom to make the choices listed above. You continue to work because you choose to work, not because you have no choice.

Use this issue to determine how to calculate your retirement needs, find out where and how to finance your retirement, and even decide where you want to retire. You can also find inspiration from Philippine Veterans Bank Chairman Roberto de Ocampo (who happens to be our Chairman as well) who, with all his accomplishments, has no plans of slowing down any time soon. Why would he when he still has so much to contribute and he is still having the time of his life?

Heinz G. Bulos
Editor-in-Chief
hbulos@moneysense.com.ph

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Table of Contents

Cover Stories:

• The Chairman: Roberto de Ocampo Takes the Lead by Excel Dyquiangco
• Retire Young and Retire Rich by Rienzie P. Biolena, RFP®, CWM®
• Retirement Benefits 101 by Jesi Bondoc, RFP®
• World’s 10 Best Places to Retire by Heinz Bulos
• Retirement Planning at 50 by Excel V. Dyquiangco

Plan:

• How Much Do You Need To Retire In Comfort by Alvin T. Tabañag, RFP®
• Retirement Benefits of SSS from the SSS Website
• RFP Money Makeover: An Overall Financial Plan for a Small Income Family by Dennis M. Espique, RFP®
• Financial Planner: Will Retirement Pay Be Enough? By Efren Ll. Cruz, RFP®
• Successtories: Breaking the Bad by Alex Araneta
• My Money Story: More than the Personality by Ginny Gonzales as told to Excel V. Dyquiangco
• My Money Story: Living by Faith Above Everything Else by Dr. Ma. Corazon Santiago as told to Ruth Manimtim-Floresca
• My Money Story: The Heart of Fitness by Chappy Callanta as told to Excel V. Dyquiangco
• My Money Story: Focusing On the Goal by Ian Simpao as told to Excel V. Dyquiangco

Invest:

• How To: How to Cut Your Investment Cost by Christopher Lim, RFP®
• Expert Advice: Step #8 – How to Retire On Rental Properties by Carl Dy
• The Bottom Line: Primer on PERA by Edmund Lao, RFP®

Spend:

• The Bottom Line: Tickle Your Palate with International Cuisines Found in Manila, text and photos by Ruth Manimtim-Floresca
• The Bottom Line: The Hot Trails In Naga By Excel V. Dyquiangco

Photos by: Dodie Legaspi