An article by the Financial Times caused an uproar when it suggested millennials would need to pay £800 (or over Php 5,000) a month into their pensions for a comfortable retirement. The said article went viral and propagated more Twitter sass and cat means than any of the other Financial Times write-ups, according to a follow-up article last Friday. The amount of £800 per month was based on the average monthly savings people need to generate a comfortable retirement.
Realistically speaking, workers would save less during their 20s compared to when they get older and receive higher salaries. The article also took a non-judgmental look at the hardships millennials are facing – from getting employed and the ensuing global recession to the problems many are having when it comes to getting to the property ladder.
In the Philippines, an employee earns more or less Php 350 a day. Lucky enough you can get a job that pays Php 500 or above. The majority of Filipino millennials expect to remain or even achieve a better lifestyle and comfortable retirement in the future.
However, according to an insurance provider Manulife, only seven percent of the millennials have monthly savings. There are only eight percent who have applied for a quarterly plan. On the other hand, some millennials (28 percent) make irregular investments “when they feel like it” while 21 percent invest depending on the market’s movement. Manulife Philippines President and CEO Ryan Charland explained that millennials seemed to be aware of their future need.
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The road to a comfortable retirement
These days, younger people do not have the luxury to ignore money matters anymore. Now the question is, “What can millennials do to have a more solid financial foundation?” Here are some tips to get the most out of your income to secure a comfortable retirement in the future:
1. Learn to take advantage
Learn to take advantage of the sharing economy. Uber and Airbnb are sharing services that display advantages to people on both sides of these transactions.
People in their 20s might not have their own house, so they might be unable to make extra cash renting out a room. However, they can save a little if they pay less for holiday accommodations when using the site or one of its rivals.
You can also rent out your passenger seat if you own a car or when you have a long journey through liftshare.com or blablacar.com. If you don’t have a car to rent, you can simply be a user and lessen your transport costs.
2. Prioritize your debts
It’s common for millennials to fall into debt. Thus, it is important to pay these debts immediately to prevent further complications.
However, you must know which one you should pay immediately. You must rank your debts accordingly and pay the most expensive one first.
3. Seek a better savings account
If you have a savings account, it might be wise to seek a bank that will give you better returns.
Peer-to-peer lending (P2P) is a new form of finance that involves customers lending spare cash to other individuals. This method cuts out the banks and the rates for both parties.
4. Get free pension cash
It is not easy to save at least Php 3,000 a month. You should try joining the company’s pension if it has one. Most companies add cash of their own to your contributions, so you are missing out if you are not signed up for it!
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