Life is a stage what's your curtain Part III

Curtain Call (56-65)

This is the time in a person's life when he reviews his achievements in his life. He reflects on what he's done for himself, for his family, and even for society. This is also the time when he vacations and travels a lot. Moreover, his health costs has increased substantially. Hopefully this person bought an insurance policy while he was younger.

People at this stage in life wouldn't normally be working anymore. At the most, they're probably doing consulting work only. At this age, since people have worked the first half of their lives, they just want to enjoy the remaining years of their life.

The problem with the "enjoying" part is that it is assumed that they've amassed a big enough nest egg. Us Pinoys probably are the only race on earth that lives the longest with their parents. This being the case, the parents, even if they want to spend the money for their own enjoyment, have a difficult time deciding on it because they still want to take care of their children.

The reason why I term this stage as Curtain Call is that this is the time people know if they've lived their lives to their fullest potential. While the person was younger, he should have found his purpose or passion. Some people drift through life without knowing what they want. And when they step into this stage, they feel a certain sense of emptiness.

A sense of emptiness is probably worse than an empty pocket. At least that's what I'd think.

At this stage in a person's life. He'd probably want to leave a legacy for his family, and for some, for society. That's why there are foundations created when people this mature an age. (Some do this earlier. There are a few selected people out there who are in any of these stages regardless of their age).

This is the time when they also do estate planning.

When we are young, we tend to not look that far ahead. But let me ask a question. What's a good retirement amount? Do you know that when you think of retirement, you shouldn't be thinking of a lump sum amount?

What do I mean? A lot of people I've talked to, when asked that very question, say

"I can retire if I have Php 10,000,000 in the bank" (just change the numbers if yours is way higher).

What you should be thinking of actually, is what is the monthly cashflow you should have at that age. I.e., do you want to have Php 50,000 per month?

The hard part in computing for the amount is, what rate of inflation do you assume so that you can find investments worth having to beat it? Not only that, what rate of return on the proposed investment is the right peg so that you can be conservative and realistic on your goals?

Imagine this, at the historical average inflation rate of 7%: Your Php 1.00 today will be worth Php 7.00 by the time you're 60 (assuming you're 30 years old right now). It doesn't sound big enough so let's make this example instead:

If the cost of a car today is Php 500,000, by the time we're 60, it'll be Php 3,806,127. Now that's a lot of Php 7.00's right?

So you can imagine what kind of retirement amount you'll be needing by then. Better start piling up those piggy storage banks and fill them everyday. :-)