Tinkering with Retirement Calculators

At age 27, it might seem like a killjoy’s trip for me to tinker with something as futuristic as retirement calculators. But it’s the necessary Excel spreadsheet leisure activity I fancied today after being confronted with a sea of elevations and Northings/Eastings coordinates coupled with some personal crisis in the family.  I needed a break from the calculations and I used another set of mild calculations to break the ice and stay in Excel.

It’s quite refreshing to look at a new set of numbers. After my stepdad got confined in the ICU because of a heart attack, my goals of insulating my financial life became more concrete. Aside from making me so worried, I kind of looked at places in my life where I can have some semblance of control in my chaotic world. And I found it in the tasks of my current project at work and in these retirement calculators. It’s weird how numbers can provide a detached sense of comfort when you are faced with a crisis. I love numbers so much more for keeping me sane.  It’s like stepping on the sands of an elusive but picturesque beach even while I work doggedly at home in between hospital visits…

image credits to Flickr user kenteegardin

Actually, I think I am a bit late, given the financial savvy I have witnessed in some younger people I’ve met in life. In fact, there was one hardcore case who has a Php 200 million retirement fund goal that he plans to achieve within the next 5-7 years. Assessing my own fiscal situation more recently, I know that I am not rich and while I love numbers, I don’t really enjoy crunching numbers for finance more than I love crunching numbers for data. My current work deliverable requires me to play with Excel more. Traverse and leveling data both require me to spend hours looking at spreadsheets. Since I was already married to Excel given my new job, I decided to check out some templates of retirement calculators.

One time I asked a guy to help me see if I can survive retirement with my current lifestyle. He told me bluntly that if I don’t alter my spending habits, I will only have enough to bury myself at age 40. Or something to that effect. Anyway, I didn’t give it much thought immediately after that encounter. But I had my financial goals in my head more solidly now than in previous years. For years, I lurked in an online money-making forum but while I knew a lot about personal finance conceptually from the wise investors in that forum, I did not have the willpower to implement it.It’s like all those insights have finally penetrated my skull and it’s starting to make sense and I’m having the drive to implement it in my life.

Times have finally changed and I have some semblance of consciousness that resources are limited on my side of the fence and if I don’t work to invest my hard-earned money in a worthwhile place, I’ll end up really miserable and working because I need to and not because I want to.

Now is the time to do away with the theories and really practice all those insights I gleaned from years and years of learning about the magic in compounding interest and the futility of just parking one’s savings in a bank account that can only yield around 1% interest per year.

Given the hard times and the numerous uncertainties that require a lot of cash, it’s good to be organized in matters like these at some point in time. Interestingly, I found some neat insights from these three calculators that gave me an idea of how much I should be saving every month to achieve my goals financially and not be in a bind. It’s not bad to plan about these things at this point in time.

1. Truly Rich Club Retirement Calculator

The TRC Retirement Calculator is the simplest of all three. It will just basically give you what kind of money you’ll have if you commit to saving a certain amount with a certain interest rate. Of course, it did not explain that 1 Million pesos today is not equal to 1 Million pesos around 50 years from now because of inflation rates. But it’s pretty good in giving a ballpark estimate of where your money will go and how much you will get out of it with your present situation. It’s a simple plug and click interface that will generate a pretty decent figure. (The advice will only come after membership, most understandably.)

2. Pinoy Savers’ Retirement Calculator

Pinoy Savers retirement calculator is the more detailed Excel sheet where you answer more questions than the first one. It kind of requires more knowledge on personal finance. But it’s pretty straightforward for me. So I just plugged some values and it gave me my required monthly savings in three scenarios: Scenario A is for budget living with little leeway for splurges, Scenario B is for fairly comfortable but with risk of running out after a few years, and Scenario C is the perpetually happy retirement package requirement.

3. Sunlife Financial Retirement Calculator

For the third one, I had to enlist the help of my friend Keit who works fulltime at Sunlife. She asked me some questions and she plugged it into Sun Life’s retirement calculator tool. Of course, the tool embeds the retirement goals in the backdrop of their financial instruments. For this case, she placed my needs at an 8% annual interest rate for my investments as a conservative amount. The results were quite close with the results I got from the Pinoy Savers calculator.

I know that I can customize my own retirement spreadsheet if I give it a lot of thought. But given the demands of my very fulfilling and mentally challenging work, I think I can just accept existing retirement calculator templates for now and just use the ballpark monthly saving requirement estimate as a guide for my daily spending.

One of the good decisions I made this year is signing up for a Sunlife Maxilink Prime account. It’s a variable insurance policy with an investment element in it. It’s pretty perfect for my needs now. I don’t have the time and energy to monitor or trade stocks directly at online portals like Citiseconline but I have some knowledge and vague idea that I still need to beat inflation if I want my money to go somewhere. As a breadwinner, I need to have my life insurance setup for my dependents in case anything happens. And then, I needed to build capital so that my own future will not involve getting one of my children as my future source of retirement fund.

Sunlife’s financial product just provided me with enough appetite to risk a little but not risk to the point of losing everything, as what can happen when you invest in stocks with no financial manager and little experience in trading to boot. If you’re new to investing, have little capital, and you need to get your feet wet in the investing side, it’s a pretty safe place to start. 🙂 Some of my friends are skilled enough in finance to take their own time and manage their funds directly. But I kind of like to piggyback my money with Sunlife’s good financial year-on-year performance for now and just think about improving the quality of my work for the next few years. If I have to pay admin charges to Sunlife for the first few years to spare me of this headache, I really don’t mind. After all, they still beat inflation considerably better than just parking my money at a savings account with less than 1% annual interest.

So there. It kind of affirmed most of my decisions in life, after having a heart-to-heart financial planning talk with my friend Keit. She also told me that Sunlife’s holding some seminars on financial planning. They have one scheduled next Thursday at Makati, November 29 from 5:30 to 7:30pm, in case any of you readers are interested in making sense of your financial goals. You can shoot my friend Keit an email at keityee@gmail.com so that she can include you in the head count.

Financial planning is something I’ve been doing for years in my head, but I haven’t really got the balls to implement all those plans because I wanted to gratify myself immediately on most days. Fortunately, we mature and improve and we learn to make the most of what we have.

And while I process data for work, and I process my financial goals, I kind of feel much better even when everything else is swimming with so much uncertainty.