What You Need to Know About Retirement Savings at 30

Did you know that if you’re in your 30s and earning around PhP30,000 a month, you can save up to PhP72,000 in one year? And investing that money into something big might just give you the perfect retirement at 60 or earlier.

by Sheen Moringa, 11 December 2017

Hitting your 30s? Why not start investing for your retirement savings now?

YOLO. You only live once. Most people think that the only ones who can live life fearlessly and tread the YOLO path are the Millennials. After all, when you are still young, you can afford to be carefree because you’re not saddled with responsibilities—yet. But what if we tell you that you can still do what you want, even when you’ve already reached and passed your prime? Yes, it’s possible. But only if you have invested in retirement savings early on.
Here are the three things you should know about investing now, so you can start building your retirement savings at 30.

1. Starting NOW Makes a Biggest Difference

Financial advisers seem to follow the “Minus 10” rule. According to the rule, you need to minus 10 from your age to get a percentage of how much you should be saving. This means that you should be keeping around 10% of your monthly income in your 20s, and around 20% when you are already on your 30s. 
For example, you are on your 30s and earning around PhP30,000 a month. Twenty per cent of that would be PhP6,000 worth of savings monthly. In a year, you could have saved around PhP72,000. Your savings could reach around PhP2,160,000 by the time you reach 60. Imagine how much you could have saved if you started 10 years earlier.
The figures can be overwhelming, and you may be struggling to save. Here’s a tool to help you stay on track: Banks now offer direct deposit options, wherein they automatically deduct a certain percentage to your payroll.

2. Sustaining Your Savings is a Must

With all the bills waiting at your door every payday, sustaining your savings is a challenge. Seems unrealistic to expect to save around PhP2 million by the time you reach 60? You think you can only sustain this kind of savings if you have a big salary? Before doubting your financial capabilities, reconsider, first, your lifestyle and daily expenses. Do you really need that new gadget you just bought? How about visiting your favorite coffee shop less frequently?

3. Investing is Worth the Risk

If you are able to sustain your savings, you can have a considerable amount in your bank account in just a few years and use this as your capital to make your money grow. How? First, invest in yourself. Are you still struggling with a small salary? Why not study and enhance your skills in your field? You can also learn a new skill that is very profitable like illustrating, photography, and speaking a foreign language. This way, asking for a raise will have a concrete basis. Or you can apply to another company that is willing to give you the salary that you want, thanks to those newly acquired skills.
You can also look into retirement insurance plans that are being offered by companies like FWD (See: FWD Fund Valuation). You may want to check some of the best retirement savings plans available for you (See: 5 of the Best Retirement Fund Methods in the Philippines). Or put your money in funds facilitated by banks, insurance companies, and other financial institutions. This way, you can just sit back and relax while your money grows.

YOLO is all about focusing on the present and enjoying the “now.” But in enjoying the present, you must not lose sight of the future. Investing now will make embracing life’s every possibility in the future not just possible but doable.