How Quarantine Period Can Help You Prepare for Retirement

Quarantine as a Glimpse of Life in Retirement

In some ways, being retired and being in quarantine are quite similar to one another. In both scenarios, you spend a great deal of time at home and use that time on things that matter to you.

For instance, being locked up at home gives you a chance to be with your family more (if you’re living with them). Meanwhile, in retirement, you’re free to either enjoy your retirement savings or explore other jobs that you think you can still do.

Here are other notable ways that quarantine and retirement may impact your life:

1. Restricted income options — Generally speaking, when you retire, you choose to no longer work. Whereas under quarantine, you are forced out of work unless you belong to the medical workforce, essential services, or a company that has telecommuting arrangements. In both cases, your source of income may come to a stop.
   
   
2. Continuous financial needs — Just because you’re retired doesn’t mean your living expenses will go away. You still need to spend on your necessities like food, medicine, or clothing.
   
   In the same manner, being confined to your home during quarantine doesn’t change the fact that you need to buy groceries, consume water and electricity, and settle household bills once the payment holiday with your bank or creditor is over.
   
   
3. Changes in lifestyle — Upon retirement, you may find yourself becoming less busy since you’re no longer working full-time. Your food or activity choices may also become limited as your body ages. Similarly, limitations in logistics due to quarantine could mean suspending your travel plans or working out at home instead of going to the gym.
   
   
4. Cultural shift — Unlike in the past decades, people who retire now are more open to the idea of continuing to work, perhaps in a different field that they would like to try or something less demanding than their previous ones.
   
   In the Philippines, lawmakers are mulling the idea of filing a bill called the New Normal for the Workplace and Public Spaces Act, which aims to make interactions during quarantine periods as contactless or as distant as possible.

Using Experience to Make a Better Retirement Plan

With quarantine giving you a better feel of what retirement looks like, you can start reassessing your goals and making more informed decisions as you prepare for retirement eventually. Asking yourself these questions can make your retirement planning more on point.

1. When is the best time to think about your retirement?
   
   Even if you’re still years away from retirement age, it’s advisable to start planning for your post-career life in your 20s when you’re already earning an income.
   
   
2. How much retirement fund do you need to sustain your desired lifestyle?
   
   If you’re aiming for a worry- and stress-free life in your golden years, you need to have a retirement fund that’s more than the bare minimum.
   
   It’s not entirely realistic to think that you’ll have fewer expenses during retirement, especially if you still have unfulfilled life goals that will require you to spend, like further education or travel. Plus, as you live longer, you’ll find that the cost of living will get more expensive, too.
   
   With that said, try to reach retirement savings that are close to 100% of your annual expenses. Working with an insurance company can be an excellent strategy to make this goal more achievable.
   
   
3. How much can you trim down from your expenses without feeling too deprived?
   
   The idea behind a retirement fund is to let you save for the future while still taking care of your current living expenses. As the quarantine situation shows, you need to allot enough money for your basic daily needs like shelter, food, water, clothing, medicine, and utilities, as well as emergency funds.
   
   Any other expenses that don’t fall under these categories could be on the least of your priorities.
   
   
4. Can you depend on your social security retirement benefits alone?
   
   No doubt, your social security pension can help augment your retirement fund. However, the truth is it may not cover all your needs and wants when the time comes that you no longer have a regular or fixed stream of income. It’s still best to diversify your investments to help you grow your retirement money.
   
   
5. What can be a good investment to help you transition to retirement?
   
   Health is a major concern that comes with aging. For one, you’ll need maintenance medication to make sure your physical condition is under control. It’s also possible for you to have a weaker immune system, making you more susceptible to various illnesses.
   
   As such, a comprehensive health insurance policy is a must-have in your retirement plan. This can ensure that you’ll get excellent health care and services to continue living longer.

Get Ready for the Future

During these trying times, you may find yourself taking each day at a time. Consider it an achievement, and perhaps a reason to prepare for whatever the future may bring. You could start by consulting our Bancassurance Sales Executive for guidance on retirement planning.