Planning Retirement In Indonesia

For Indonesian workers, planning to finance retirement should be a common sense. But not everyone starts early. One has to secure enough savings so that they can be appropriately funded and live a happy retirement life. To accumulate enough savings for retirement, one must start from an early age, at a time when they are still productive and have job. We should not wait until it is time to retire to start saving money because by then it will be too late. There are some effective methods of financing retirement which you may want to start doing now. 

Savings Account - Opening and regularly contributing to a savings account may be one of the safest methods for you to accumulate enough money for retirement life. Despite the low interest rate and existence of administrative fee, the risk is lower compared to investing money in other financial instruments. Start now by sparing not less than 10% of your total monthly income to be deposited into your savings account. The more you can spare, the better. But, you have to do it consistently every month. 

Invest In Assets - Savings account alone may not be enough to finance your retirement life. Thus, you have to explore other available options. Another great option is to start collecting some assets that will have greater selling value in the future, such as land and property.

You may also consider doing financial investment. If you could do it properly, investing early is recommended as it could provide an extra income later when you have retired. The ideal time to invest is by the time you start working. Some good investment options include long-term mutual funds and bonds. 

Insurance - While you are still productive, you can also set aside a budget for insurance. Health and other insurance products could provide effective protection during retirement age. Try to consult with an insurance agent regarding the best insurance for you. 

Side Business - The last alternative to earn extra income when retiring is to have a side business. You can start your side business when you are still a professional, or later after you retire because you will have more time to focus on that side business. The preparation, however, can start from now.

In addition to the five methods of financing retirement above, you may receive certain amount of money from your children. Many parents expect their children to finance, which is a unique factor about retirement in Indonesia. But it is best not to expect anything from your children. This way, you will not ‘burn’ your children and you can try to be financially independent during retirement age. 

Being Prepared - You need enough savings not only to finance your retirement but also to take care of things that may happen unexpectedly in the future. As you retire, you may encounter major issues surrounding retirement in Indonesia, such as: 

Health Issues - Nobody can guess what the future brings. Everything about the future is uncertain, including health. There is no guarantee that one will always be healthy. As we grow older, our body grows weaker too. That is why you need to make sure that you have enough money to pay for your medical bills in case your healthy drops – being sick is expensive. 

Loans - You will not be facing this issue during retirement if you have paid off any loan installments when you are still working. Try to settle all loans, especially the heavy ones, such as house and motor vehicle installments before you retire. This way, you will live your retirement life with less worry.