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5 Steps To Retiring At 40

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People normally retire at 60 or 65 here in the Philippines. In most cases, though, when people retire, they are not able to enjoy.

This is true especially for those who have been employed their whole life. If they did not do anything to prepare for their retirement, they would surely just rely on their SSS pension, which is not that big.

early retirement

The good news is that time has changed. And these changes can be taken advantage of in order for everyone to have a chance to retire at 40. A time when you are not that old yet, a time when you can still enjoy.

Step 1 – Save

This is the most difficult part, but the most crucial one. Some experts advise that saving 20% of your net income and not touching it for 12 months is the first step.

See: How To Save Without Depriving Yourself

Step 2 – Business

After a year, even if you fall into the minimum pay scale, you will have more than P30,000 if you save 20% every month. You can opt to spend another year saving, or you can invest this in a business. It has to be something that will help you add more income.

See: Affordable Franchise Options (Less Than Php50,000)

Step 3 – Continue saving

With more income, you’ll have more savings when you continue the 20% rule. Continue doing this while you are working and earning from the business.

See: 4 Steps To Save If You Fall In The P15k-P17k Income Bracket

Step 4 – Invest

Once your savings are big enough, you can start investing for your future. Remember, your job or your main income, should not be paying for your investments. You invest the money that you earn from the extra business you started. This includes investment options and insurance packages.

See: Differences Between Mutual Funds, UITF And VUL

Step 5 – Diversify

When you have started investing, look at all your options when it comes to investing. It is better to not put all your eggs in one basket, they say. Diversify your investment portfolio while minimizing risks and helping you retire at 40.

See: What Is Investment Diversification?

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