Can you save up for your pension fund with Mutual Funds investment instrument? How to prepare it? Let's discuss further.
Pension funds are generally prepared to fulfill the needs in old age. So that later you can live with a peace of mind, prosperous, and not think about financial problems anymore to support your daily life. Saving and having this retirement fund is mostly sought after and become the goal of many. In fact, many of the millennial generation are currently looking for jobs that include pension funds, so there is no need to worry anymore about money when they are no longer working because the income they earn is automatically deducted from the pension fund.
If the company you work for doesn't cover its own retirement fund, then you need to save and set aside a percentage of your income for retirement so that it can cover your old age.
Before that, you first need to know the tips to manage retirement funds to be prosperous in old age. Managing a retirement fund can ensure your security and comfort past your productive age.
Here are some tips for managing and preparing for retirement funds with Money Market Mutual Funds.
What is Money Market Mutual Funds
Mutual Funds is used to collect and handle funds that will be managed by an expert Investment Manager and invested in several investment instruments in the form of a portfolio. The Investment Manager must have legal, licensed, and registered with the Financial Services Authority.
Money Market Mutual Funds is a form of investment that can be used to prepare for retirement funds. When compared to saving money conventionally in a bank, Money Market Mutual Funds investment will be more profitable because the longer and more consistent you invest, the greater the potential for your money to grow.
Some of the advantages of investing in Money Market Mutual Funds are that they are not subject to tax deductions and your funds can be withdrawn whenever you want, meaning that they have high liquidity without going through a complicated process.
How to Calculate the Correct Pension Fund for a Prosperous Life
You should start saving your retirement funds as optimally as possible early on. The more funds you collect, the more prosperous your old age will be and you don't have to burden your children or other family members.
To determine how much retirement funds you need, you can calculate it by estimating your current cost of living each month. For example, suppose you want to plan to retire at the age of 50, while you are currently 30. Then you will prepare the funds for the next 20 years.
In general, human life expectancy reaches the age of 75 (25 years after retirement). This means that you have to multiply your current estimated cost of living per year by 25. If your estimated cost of living in retirement is the same as it is today, which is IDR 5,000,000 per month, then you just need to multiply this cost by 12 (per year) and 25.
The calculation is as follows: 12 months x IDR 5 million (monthly living expenses) x 25 years = IDR1,500,000,000
If you are saving now for the next 20 years, then every month you have to set aside a minimum of IDR1,500,000,000: 20 years: 12 (number of months in a year) = IDR6,250,000 per month. You can save these funds through Mutual Funds or other investments.
The results will be a retirement fund that you have to prepare from now on. With the potential gains that come from investing, your funds have the potential to continue to grow above inflation, so that they will meet the target you want when you retire. But preparing more funds than the calculated results will certainly be better for you. So prepare your retirement fund as well as possible.
Tips for Preparing a Retirement Fund So You Are Ready for Old Age
Even though you are still relatively young, there is nothing wrong with preparing a retirement fund for old age so that you can enjoy the future with a peace of mind. Here are tips for preparing a retirement fund for your old age:
1. Look for Additional Income
You have to prepare additional income in advance. You can't rely on just one income each month, let alone to prepare a retirement fund. You need to think of ways to gain additional funds without interfering with the main job.
One of them is through Money Market Mutual Funds investment. Investing can help you earn real income without interfering with your main job. In addition, investing in Mutual Funds can also be profitable for you now and in your old age.
You can also work as a freelancer for activities you like such as content writing, video editors, photographer, and others. These extra jobs can help you earn money income for savings in old age.
2. Not Relying on Office Pension Funds
In addition to looking for additional work to add to your retirement income, you also need to set aside some salary to raise your pension fund. Because relying on pension funds from the office alone will not be enough. So you need to set aside your salary to add to your retirement fund.
This is so that you don’t lack retirement funds and can be raised optimally. Save some of your monthly salary to add to your retirement fund so you can be ready and remain prosperous in old age.
3. Control Your Spending
To prepare a retirement fund, you should start now to reduce unnecessary spending. Reduce your consumptive spending from now on. Such spending can drastically raise your monthly costs.
Do a monthly spending plan. Stay in control by recording your expenses and income every month or every week.
Focus on shopping for essentials and what you need, not what you want. So that your expenses do not swell, and you can set aside to save, whether for retirement or for investment and achieve your target.
4. Pay Off Your Debt
After going through the 3 tips above, the next tip is to pay off most of the debt you have. Paying off debt can help you prepare your retirement fund in peace without having to be burdened by other bills.
If necessary, do not get into debts for consumptive needs, this can lead to future burden. Reduce unnecessary debts and pay off your debt immediately if you want to start raising retirement funds for old age.
If forced into debt, make sure the debt is used for venture or business capital funds, or funds to support your productivity.
5. Focus on Investing
In your youth today, investing is one of the most profitable activities. Investing makes you care about the financial condition of your old age. You can choose your own investment for the short term or long term.
If your main purpose of investing is to prepare a retirement fund in old age, then one of the investment options you can choose is Money Market Mutual Funds investment with DBS Treasures priority banking.
Mutual Funds Investment with DBS Treasures, What are the Benefits?
After knowing the ways and tips for preparing a retirement fund above, the thing you need to do now is to start investing in Money Market Mutual Funds. Why with DBS Treasures? Here are the advantages that can convince you:
1. Your investment funds are managed by professionals
Every incoming fund for Money Market Mutual Funds investment in DBS Treasures is managed by reliable and experienced Investment Managers. Hence why you can invest confidently.
2. You will gain investment advisory
You will gain advisory when investing. Including insights that suits your needs and aspirations on investment opportunities from an expert and reliable financial team.
3. Reduce risk through diversification
Your investment funds will be diversified into various types of assets so that you will later minimize the various types of risks faced in investing.
4. Easey Mutual Funds Investment
For Mutual Funds investments, you can do it easily on the digibank by DBS Application. This application enables you to easily register, buy, sell, and switch Mutual Funds conveniently.
Especially for those of you who don't have an SID (Single Investor Identification) from KSEI or the Indonesian Central Securities Depository, you can register through this application.
Investing in Money Market Mutual Funds with DBS Treasures will make it easier for those of you who want to prepare retirement funds for old age.
