Even it seems still far away, for most millennials, everyone surely want to live happily during old ages. Not as easy as it sounds, but you can still work for it. From vary resources, here things you need to consider when preparing retirement.
1. Pay Off Debt
List all your debt, from installments, credit cards, home loan to vehicles. The main key to live happily during your old age is pay off all debts before retirement. Therefore, you need to save cash at least 30 percent from your current income to pay off all debts.
2. Retirement Fund
Besides paying off all debts, you also need to save enough money to pay your bills when you are no longer productive and working depending on your income and needs. However, if you are single and have no dependents, no children, no partner and no debts, it is highly recommended to prepare four to six months worth of living expenses. It is surely a huge number to be prepared at once. Therefore, you need special strategy, discipline, and strong commitment to save enough money for your retirement.
Besides, you can also take advantage of retirement program by BPJS Ketenagakerjaan (Healthcare and Social Security) to provide decent income after participants enter retirement ages. Participants of this program are registered workers who paid monthly contributions.
There are six benefits of retirement program including Manfaat Pensiun Hari Tua (MPHT); cash for participants for minimum 15 years contributions at retirement age until they passed away, Manfaat Pensiun Cacat (MPC); monthly cash for participants facing injury while working and have permanent total disability, Manfaat Pensiun Janda/Duda (MPJD); cash for widows/widowers as participants’ heirs, Manfaat Pensiun Anak (MPA); monthly cash for two children as participants’ heirs, Manfaat Pensiun Orang Tua (MPOT); for participants’ heirs and Manfaat Lupsum.
3. Life Insurance
Kontan.co.id defines life insurance as compensating of loss and risk as an uncertainty based on unpredictable nature of risk to the insured’s family and loved ones after the insured’s death.
According to Lifepal, in Indonesia you can choose one of these four different type of life insurances based on your needs, Term Life; time of insurance can be arranged from 5 to 30 years for insured’s family or loved ones, Whole Life; maximum protection (limit 100 years) which usually accompanied with retirement funds, Unit Link; used for investment and Endowment Life Insurance; for education, retirement or wedding funds.