HAPPY FATHERS DAY !

What's the best gift to our father? Maybe that's what you're thinking when you hear about Father's Day. (Tama ba ako?) Tuesday this week (June 16, 2009), I was part of the RFP's (Registered Financial Planners) who conducted a financial planning clinic at DOLE (Department of Labor and Employment) at Intramuros Manila. The employees who attended the clinics are mostly retirees and those who opted for early retirement. That time, a sudden thought occupied my mind. I wondered how many of them are ready or equipt to handle retirement. Do they have enough funds to enjoy their golden years comfortably or do they need to rely on their children to feed and care for them? Do they have their own home to stay or will they stay with their children? Honestly, I guess most of them don't have any retirement plans, especially with regards to making sure their retirement money last a lifetime.

I interviewed one of them and learned that if they've worked less than 30 years, what they'll get is a lump sum based on the computation of : 3/4 multiplied by the last monthly salary multiplied by the number of years of service.

Well, let's say that an employee contributed 25 years of his life in government service, and his last salary is around P20,000 a month.

Retirement money = 3/4 x P20,000 x 25
= P375,000

How long will that money last if he saves it in the bank and spends only around P7,000 a month from the fund. Answer: approx 4.5 years.. =(

Now, going back to our topic. I'm sure many of our parents provided us the best care and comfort that they can give. More often than not, that care is at the expense of their retirement. Because of us, they've failed to accumulate enough money for their retirement. As their children, maybe it's just right that we give back when we are already financially capable .

"As a financial planner, I suggest that to augment their retirement money, we help them by creating and contributing to a fund purpose of which is to give our dear parents a better independent retirement life" - Berns

It's not much actually. If your dad is already 50 and planning to retire at age 65, a little amount of only P1,000 each month starting now until he retires, will give your dad an amount approximately P500,000 - P600,000 when he retires. Consider it as a retirement gift for your dear father. Not much, but he'll be proud of you.

Maybe, just to make sure that your dad will have that amount no matter what might happen to you, get a term insurance and make your dad the beneficiary. A 10 year term insurance of P500,000 in face value will cost you only around P2,250 a year! It's cheap. Most of all, you can be sure that even if something unfortunate happens to you, you'll still be able to express your love for your dad by ensuring him a better retirement life.