Hello, the book that I interpreted for you today is "30 Years Later, What Will You Take to Support Yourself?" This book has a total of 86,000 words, and I will explain the essence of this book to you in 5 issues. This issue is the fourth issue of the explanation: from the 20s to the 50s, how to better plan the future of the pension life.
In the last issue, we talked about Qian Xiaojun's understanding of the risks of financial products, the selection principles and the differences between funds and insurance from his expert friends, and began his own pension planning road.
In this issue, we will talk specifically about how to better plan the future pension life from the 20s to the 50s.
01
The eight stages of pension planning
Qian Xiaojun's story is not a special case, most people in their thirties and forties rarely worry about their old-age life. They are old and young, with work pressure and life anxiety, how can they still have the energy to think about their life after retirement?
But if we are all like Qian Xiaojun before, we have not been prepared for retirement, then what awaits us is bound to be a bleak future. Saving money after retirement may be more important than you think.
So what to do?
Let's talk about the steps of pension planning, that is, the eight stages of pension planning.
Phase 1: Establishment of a Retirement Plan – Calculating the cost of retirement living.
Based on the current age, the estimated retirement age, the estimated life expectancy (including the partner) calculates the retirement life time. Estimate the cost of each month after retirement, and finally calculate how much money you need after retirement.
Take Qian Xiaojun as an example. He assumed he could live to be 85 and his wife to be 92. After retirement, they lived together for 25 years, and the wife lived independently for 10 years, for a total of 35 years. Since the cost of living for the wife's 10 years of living alone is halved, the retirement time can be counted as 25 years plus 10 years multiplied by one-half, that is, a total of 30 years.
The second stage: the establishment of a plan for the elderly – the estimated income of the public annuity.
South Korea has a social pension plan and a national pension. This may be similar to our country's pension. South Korea's national pension payment ratio is decreasing every year. For example, Qian Xiaojun originally expected to get a national annuity of 6,000 yuan per month, but in fact he only had 3,000 yuan per month. China's pension calculation method is more complicated, and it is related to the average monthly wage, monthly average contribution wage and personal accumulated contribution period of local workers in the previous year at the time of retirement. After we all understand clearly, we can roughly calculate how much the pension is.
After deducting the pension you have calculated, you can calculate how much more you need to meet the needs of retirement, and take into account the 3% price increase rate. For example, Qian Xiaojun calculated that he needed 3.2 million retirement funds, taking into account the 3% price increase rate, and 25 years later he would have 6.8 million, that is, 6.8 million at the age of 60 to live the retirement life he expected.
If we calculate the amount of retirement we need and find it difficult to achieve, we can only lower the standard of retirement life.
Phase 3: Review the current financial situation – check the assets and liabilities
Find out what your assets, liabilities and net worth are. It is necessary to distinguish which assets are prepared for retirement and cannot be diverted for other purposes, such as children's education, children's marriage, and improved housing.
Phase 4: Review the current financial position – total revenue and total expenses.
If you and your partner both have jobs, both of your wages need to be counted. In addition to wages, other income such as rental income and sideline income are also included.
Then there's the calculation of expenses. It is best to calculate fixed and floating expenses separately. Fixed expenses are fixed monthly expenses, such as mortgages, car loans, insurance premiums, etc. Floating expenses are meals, entertainment expenses, clothing expenses, etc.
Stage Five: Examine your current financial situation – the ability to save.
When you check your income and expenditure, you can also draw out the amount of money you may save in the future. It should be noted that these savings include not only pension funds, but also children's education funds, children's marriage costs, financial principal and emergency funds. Therefore, savings for retirement are best managed separately from savings for other purposes. Another point is that setting a rate of return that can be achieved over a certain period of time and setting a goal can prompt you to increase your savings every year.
Stage 6: Figure out the funds you can prepare for retirement
Through the combing of the first five stages, we basically understand the funds needed for retirement life, the current assets and liabilities of the family, and the ability to save. Taking Qian Xiaojun as an example, his capital required for retirement is 6.53 million, the net assets prepared for retirement are 270,000, and the reserve is 2.3 million. Then the funding gap is 6.53 million minus 270,000, and then subtract 2.3 million, and the result is 3.96 million.
Phase 7: Develop a viable plan for retirement
The funding gap has been calculated and the plan is about to begin. And need to be adjusted through practice. There are three ways to make up for the lack of funds:
The first is to improve the ability to save. For example, reduce expenses, increase income through part-time or side jobs, and extend working hours.
The second is to dispose of assets that do not generate profits and incur expenses. For example, Qian Xiaojun sold a high-end car; sold a big house for a small house.
The third is to increase the rate of return. To buy some high-return wealth management products, it is best to seek the help of experts.
Phase VIII: Implementation and periodic readjustment
It is only through execution that the plan is reasonable. If there is a discrepancy with the plan in the implementation process, it is necessary to find the cause, solve it in time, or adjust the plan in time.
02
Different pension plans for different ages
Invest in yourself in your 20s.
Control your vanity and desires, use credit cards with caution, and control credit card debt within 20%.
It's best to save more than half of your monthly income or invest in it. Invest in yourself and expand your capabilities. Listen to the advice of friends, family and experts to diversify your investments.
If you want to increase your annual salary, you also need to learn to invest in yourself, such as improving your English speaking ability, business processing ability, and interpersonal skills, etc., but compared to these, investment in health is also very important.
When you are in your 30s, you should think carefully about loan investment.
Clarify the asset and liability position. It is more reasonable to control the housing debt ratio within 30% of the total income, and to control your own liabilities within the scope of your ability.
The 40s are an important asset formation period.
In the 40s, there are old people to take care of, and there are small ones to educate, and if you are not prepared enough when you are young, you must start to adjust the structure of family assets in your 40s. It should be noted that retirement living funds are not diverted for other purposes. Maximizing retirement funds can increase investment savings and funds. Liquidate your debts and reduce the number of credit cards.
When restructuring assets, we can ask ourselves the question: Can these assets allow me to live a happy retirement life?
For example, buying a high-end car, it looks like there is face, but to repay the loan, and the car will depreciate, it can not be counted as an asset at all, in fact, there is no need to have.
In addition, we must also pay attention to the education investment of our children, blind financial investment, and control our greedy thoughts. Preferably, have a professional financial advisor guide you.
After the age of 45, the focus should shift from the "accumulation" of assets to the "protection" of assets.
In his 50s, the shift in investment direction is the focus.
Before the age of 60, the amount of money raised for retirement is more than 90% of the total amount of the plan.
It is necessary to shift investment from high risk and high return to the direction of stable low risk yield, ensure the safety and liquidity of funds, and pay attention to diversification. Be flexible when it comes to real estate issues. For example, narrowing your living area or moving to the countryside. In addition, 50 years old should be the starting point for the second half of life, so this time to find a job that can be cultivated for life.
In this issue, we talked about the eight stages of pension planning and how different age groups from their 20s to their 50s can better plan their future pension life.
In the next issue, we will talk about the top ten tips for salary earners to become rich.
We'll see you next time.