this is all about Retirement and Estate Planning

1. Retirement and Estate Planning
Learning Outcomes:
 Recognize the importance of retirement planning and
identify the three biggest pitfalls to good planning
 Differentiate among the types of basic and
supplemental employer sponsored pension plans
 Understand what are retirement frauds
 Identify the best retirement fund methods

2. Introduction
 Retiring is easy. What’s difficult is retiring in style, and that’s where retirement planning comes
into play.
 But to enjoy a comfortable retirement, you must start now- for one of the biggest mistake people
make in retirement plan is waiting too long to begin.
 Accumulating adequate retirement funds is a daunting task that takes careful planning.
 Like budgets, taxes, and investments, retirement planning is vital to your financial well-being
and is a critical link in your personal financial plans.

3. “RETIRING IS EASY. WHAT’S DIFFICULT IS RETIRING IN STYLE”

4. HOW MUCH MONEY WILL YOU NEED WHEN YOU RETIRE?
 Many people stay healthy and active for 20 years or more after
they retire.
 If you start planning and investing soon enough, you can spend
those years enjoying yourself instead of worrying about paying
the bills

5. What is Retirement?
 Simply put, it is that period of life when an individual is no longer working or at the commencement
of such a period.
 According to a Harvard Study, it is worrying under the following circumstances.
 When it is unplanned and involuntary
 When the wage or salary is the only means of income
 When one’s home life is unhappy and work has provided an escape
 When there is pre-existing bad health

6. Why Retirement Planning
 You need to plan your goals and lifestyle that you would want to
pursue post retirement
 You will need to ensure that you have an adequate life and health
insurance cover to provide for illnesses that are inevitable at this
stage of life.

7. Importance of Retirement Planning
To help you maintain the required lifestyle.
To ensure self-sufficiency at retirement
Provide for emergencies

8. Retirement Age
 The age at which you retire or choose to retire can have a substantial impact on
your retirement plans
 Three Possibilities:
 Full Retirement Age
 Early Retirement
 Delayed Retirement.

9. Retirement Age
 Full Retirement Age:
 This option is helpful if the individual had an average salary earnings throughout the working life. In this
scenario, the benefit received in the first year of retirement will suffice for the retirement period.
 Early Retirement:
 In this scenario, the retirement corpus will be permanently reduced and the individual would be getting lesser
benefits after reaching the normal retirement age.
 Delayed Retirement: This benefits you in two ways
 Additional years of earning income
 Better benefits at the time of retirement.

10. ROLE OF RETIREMENT PLANNING IN PERSONAL FINANCIAL PLANNING
 The financial planning process would be incomplete without retirement
planning. Certainly, no financial goals are more important than achieving a
comfortable standard of living in retirement.
 In many respects, retirement planning captures the very essence of financial
planning.
 It is forward looking, affects both your current and future standard of living and
can be highly rewarding and contribute significantly to your net worth.

11. ROLE OF RETIREMENT PLANNING IN PERSONAL FINANCIAL PLANNING
 The first step in retirement planning is to set retirement goals for yourself.
 Take some time to describe the things you want to do in retirement, the standard
of living you hope to maintain, the level of income you’d like to receive, and any
special retirement goals you may have.
 Such goals are important because they give direction to your retirement planning.
But they’re subject to change over time as the situations and conditions in your
life change.

12. ROLE OF RETIREMENT PLANNING IN PERSONAL FINANCIAL PLANNING
Once you know what you want out of retirement, you’ll also want to formulate an
investment program.
This usually involves
1. Creating some type of systematic savings plan in which you put away a certain
amount of money each year.
2. Identifying the types of investment vehicles that will best meet your retirement
needs.

13.  Investment and investment planning are the vehicles for building up
your retirement funds.
 They’re the active, ongoing part of retirement planning in which you
invest and manage the funds you’ve set aside for retirement.
 Tax planning is also important because a major objective of sound
retirement planning is to legitimately shield as much income as possible
from taxes and in so doing maximizing the accumulation of retirement
funds.

14. THE THREE BIGGEST PITFALLS TO SOUND RETIREMENT PLANNING.
 Set a more realistic goal. But when you set that goal, remember; it’s not going
to happen by itself; you’ll have to do something to bring it about. And this is
precisely where thins start to fall apart. Why? Because when it comes to
retirement planning, people tend to make three big mistakes:
 They start too late
 They put away too little
 They invest too conservatively

15. THE THREE BIGGEST PITFALLS TO
SOUND RETIREMENT PLANNING.
 Many people in their 20s, or even 30s, find it hard to put money away for
retirement.
 Most often that’s because they have other more pressing financial concerns-
such as buying a house, retiring a student loan, or paying for child care.
 The net result is that they put off retirement planning until later in life- in
many cases, until they’re in their late 30s or 40s

16. RETIREMENT BENEFITS

17. WHAT ARE RETIREMENT BENEFIT SCHEMES?
SCHEMES OPERATED OR SPONSORED BY THE STATE, EMPLOYERS OR A GROUPOF EMPLOYERS.
GOOD RETIREMENT PLANS WILL HAVE THE FOLLOWING CHARACTERISTICS.
PROVIDE REGULAR INCOME AFTER RETIREMENT
LUMPSUM PAYMENT AT RETIREMENT
TAKE CARE OF EFFECTS OF INFLATION
MEETS MEDICAL EXIGENCIES

18. PLANNING TO RETIRE
• HERE ARE SOME TIPS THAT WILL HELP YOU MAKE THE MOST OF YOUR
RETIREMENT PLANNING
 KNOW HOW MUCH YOU’LL NEED TO RETIRE IN COMFORT
 THINK ABOUT WHERE YOU WANT TO LIVE AND THE COST OF LIVING IN
THOSE LOCATIONS
 FIND OUT ABOUT YOUR SOCIAL SECURITY BENEFITS
 LEARN ABOUT YOUR EMPLOYER’S PENSION OR PROFIT-SHARING PLAN

19. EMPLOYER SPONSORED PROGRAMS
• SUPPLEMENTAL PLANS
• IN ADDITION TO BASIC RETIREMENT PROGRAMS, MANY EMPLOYERS OFFER SUPPLEMENTAL PLANS. THESE
PLANS ARE OFTEN VOLUNTARY AND ENABLE EMPLOYEES NOT ONLY TO INCREASE THE AMOUNT OF FUNDS
BEING HELD FOR RETIREMENT BUT ALSO TO ENJOY ATTRACTIVE TAX BENEFITS. THERE ARE THREE TYPES OF
SUPPLEMENTAL PLANS: PROFIT-SHARING, THRIFT AND SAVINGS, AND SALARY REDUCTION PLANS.
• PROFIT-SHARING PLANS
• A PROFIT-SHARING PLAN IS A TYPE OF DEFINED CONTRIBUTION PLAN THAT ALLOWS COMPANIES TO HELP
THEIR EMPLOYEES SAVE FOR RETIREMENT. EMPLOYERS USE THESE PLANS TO GIVE THEIR WORKERS A STAKE IN
THE COMPANY'S SUCCESS. IT'S ALSO A BENEFIT THAT CAN BE USED TO ATTRACT NEW HIRES.

20. EMPLOYER SPONSORED PROGRAMS
• THRIFT AND SAVINGS PLANS
• THE TSP IS A DEFINED CONTRIBUTION PLAN, MEANING THAT THE RETIREMENT INCOME YOU
RECEIVE FROM YOUR TSP ACCOUNT WILL DEPEND ON HOW MUCH YOU (AND YOUR AGENCY OR
SERVICE, IF YOU’RE ELIGIBLE TO RECEIVE AGENCY OR SERVICE CONTRIBUTIONS) PUT INTO YOUR
ACCOUNT DURING YOUR WORKING YEARS AND THE EARNINGS ACCUMULATED OVER THAT TIME
• SALARY REDUCTION PLANS
• THIS IS A SYSTEM COMPANIES UTILIZE TO ALLOW EMPLOYEES THE OPTION OF HAVING PAY-ROLL
REDUCE THEIR CASH COMPENSATION AND HAVING THAT REDUCED AMOUNT BE CONTRIBUTED TO
THE EMPLOYEE'S PENSION PLAN, INSURANCE PLAN OR ANY OTHER BENEFIT PLANS AVAILABLE TO
EMPLOYEES.

21. COMMON TYPES OF FRAUD
INAPPROPRIATE INVESTMENTS
MAY BE TOO RISKY FOR SENIORS
AFFINITY FRAUD
AGGRESSIVE SALES TACTICS
PRESSURE TO DECIDE RIGHT AWAY

22. TIPS FOR AVOIDING FINANCIAL FRAUD
• CHECK NEW INVESTMENTS WITH SECURITIES REGULATOR
• DON’T SHARE PERSONAL INFORMATION
• BE SKEPTICAL ABOUT OFFERS THAT ARE TOO GOOD TO BE TRUE
• GET WRITTEN DOCUMENTS AND FULL ANSWERS TO YOUR
QUESTIONS
• DON’T INVEST IF A SELLER IS EVASIVE OR SECRETIVE

23. PROTECT YOURSELF BY:
CHECKING SELLER IS REGISTERED WITH THE SECURITIES
REGULATOR
NOT SHARING PERSONAL INFORMATION
AVOIDING OFFERS THAT ARE TOO GOOD TO BE TRUE
AVOIDING SELLERS WHO ARE EVASIVE OR SECRETIVE
IF YOU SUSPECT FRAUD, CONTACT SECURITIES REGULATOR OR
POLICE

24. 5 of the best retirement fund methods in the
Philippines
 Pension Plans
 PERA
 Insurance Plans
 Financial Funds
 Real Estate

25. Pension Annuities or Funds
• A pension annuity is a financial product that pays you a guaranteed income for a fixed period
or for the rest of your life. When you retire, you can choose to use some or all of your pension
savings to buy an annuity.
• Pension plans provide you with monthly allowances or a whole lump sum amounting to your total
contributions.
• One of the most accessible pension plans in the Philippines is facilitated by the Social Security
System (SSS).
• This is considered as one of the easiest ways to invest since SSS contributions are mandated by
law, and are automatically deducted from your salary.

26. PERA
• The Personal Equity Retirement Account (PERA)
• PERA is a type of retirement investment plan that can only be availed through banks,
insurance companies, or any other administrator accredited by the Bangko Sentral ng
Pilipinas (BSP), the Insurance Commission, and the Securities and Exchange
Commission.
• PERA is a voluntary retirement contribution plan that gives you the freedom to save and
invest up to ₱100,000 annually.
• Also, the returns are completely tax-free.

27. Insurance Plans
• Another way to invest for your retirement is through insurance plans,
wherein contributions can result to lump sums later in life.
• Aside from the financial protection it can provide you and your family
upon your death and in the event of critical illness or accident, it is also
an investment which you can potentially grow.

28. Financial Funds
• Banks, insurance companies, and other institutions offer a variety
of funds already invested in a diverse set of industries.
• Bonds, stocks, and other investments can be quite complicated
but these institutions have fund managers who will take care of it
for you

29. Real Estate
• Owning a home or any property by the time you turn 50 or 60 is one of the main goals of
Filipinos, and for good reason.
• It’s an investment that makes sense, especially if you can no longer rely on a monthly
income for rent.
• The value of your house or condominium unit appreciates as the years go by, especially if
you have chosen a good location.
• In addition, owning property that can eventually be rented out can give you a source of
income once you have retired.

30. 5 of the best retirement fund methods in the
Philippines
 Pension Plans
 PERA
 Insurance Plans
 Financial Funds
 Real Estate

31. QUESTIONS!

32. Three Possibilities of Retirement?
Full Retirement Age
Early Retirement
Delayed Retirement.

33. What are the importance of Retirement
Planning?
To help you maintain the required lifestyle.
To ensure self-sufficiency at retirement
Provide for emergencies

34. What are the Three Biggest Pitfalls to Sound
Retirement Planning?
They start too late
They put away too little
They invest too conservatively

35. Common types of fraud in Retirement Planning?
Inappropriate investments
May be too risky for seniors
Affinity fraud
Aggressive sales tactics
Pressure to decide right away

36. 5 of the best retirement fund methods in the
Philippines?
Pension Plans
 PERA
Insurance Plans
Financial Funds
Real Estate