First published: 11 November 2022 @ 6:00 pm
Financial freedom is a wonderful thing. The more we learn about money and our financial situations, the more we become aware of how little we know.
This is especially true for Asians, who generally tend to be less knowledgeable about money than people from other cultures.
In this article, we’ll take a look at the top three fears Asians have when it comes to retirement. These are things that most people think they know, but they don’t really understand until they’re in the thick of things.
Three Fears Asian Have When It Comes to Retirement
Retirement can be a daunting prospect, especially if you don’t feel like you have a good handle on your financial situation. Here are some examples of the top three retirement fears that Asians have.
Fear #1: “I don’t know what I will do with my time when I retire” (craving for adventure)
This is something that many people have a hard time coming to terms with. Which is, once you retire, your entire daily life changes drastically.
Actually, there are still plenty of activities that you can do once you stop working, for example, travelling. But, many Asian parents worry that their kids won’t want to do anything once they stop working.
Social security and other retirement funds are important, but so is having a plan for what you want to do with your time. This is something that you should start thinking about well in advance of retirement.
You can also deal with this by starting to prepare early. So, that your children have time to adjust and find something they’re passionate about before they retire.
If you plan on travelling once you retire, start saving up early and make sure your kids are old enough to go with you!
Fear #2: “I don’t know how much I’ll have to save for retirement”
Asians tend to live below their means, which is great if you can do it. However, if you aren’t used to living below your means, then the thought of living on less money than usual may be scary.
The first thing you should do is figure out how much you need in order to retire comfortably.
In the US, it’s recommended that most people should have about 60-80% of their pre-retirement income. This is done in order to live comfortably throughout retirement (though this percentage varies depending on your personal situation).
This means that if you want to retire with a decent amount of money (roughly $40k-$50k per year), then at least $25-30k per year will be needed for living expenses.
Fear #3: “I don’t know how I’ll handle the financial pressures of retirement”
This is a very common fear among Asians. It might be mainly because they’ve never experienced a time when they didn’t have to work. For Americans, this isn’t the case.
This means that you may feel like your future will be full of uncertainty, and you won’t know how to handle it. Moreover, the Coronavirus pandemic has made this fear more real for Asians as the stock markets have crashed without being expected.
One thing that can help you is to build your retirement fund early. Many people don’t start saving until they are in their mid-30s. It means that they won’t have much time to save before they retire.
Start saving early and be aware of the financial pressures you may feel in the future. Your income levels might change, and you’ll have to adjust your spending habits. But, if you start saving now, you’ll be in a much better position to handle these changes.
Strategies For Overcoming These Fears
It’s important to prepare for these fears and make sure you’re mentally prepared for what retirement will bring. However, it is unnecessary to be afraid of them.
Instead, learn to appreciate the fact that retirement is a fresh experience for most people. Especially if you haven’t been in this situation before. As long as you stay mentally strong, then your fears shouldn’t keep you from enjoying retirement!
Besides overcoming your fears about retirement, there are also some other things that you can do to make sure it goes smoothly. You could try these strategies:
1. Start saving early
If you haven’t started saving for retirement yet, then it’s time to start! It’s always a good idea to start as early as possible. If you don’t have enough money in your account to cover the cost of retirement, then your future will be uncertain.
Your current business activity might give you some good opportunities. But, there is no guarantee that it will continue in the future.
Start investing in mutual funds as soon as possible. So, you can get a good return on your money and accumulate some funds for retirement.
2. Have an emergency fund in place
This is something that many people don’t think about when they first plan for retirement. An emergency fund is something that can help you out when unexpected events occur (such as losing your job).
The best way to make sure this happens is to save up some money from each paycheck and put it into an emergency fund.
For example, let’s say you make $50k per year and have $10k saved up for an emergency fund. Therefore, you should be okay for about three months without income (assuming there are no other sources of income).
In the US, it is recommended that most people should have about three months of emergency funds in place.
3. Learn how to invest
Once you invest, it’s important to learn the ropes and understand how things work. There are many different types of investments, such as mutual funds, stocks, bonds, etc.
Income levels are something that might change when you retire. So, if you learn how to invest, you can make sure that you’re prepared for it.
By doing an investment, you will also have an opportunity to gain more money in the future. It’s not impossible for you to have an additional income.
The Bottom Line On Overcoming Fears About Retirement
It can be scary at first when retirement is right around the corner. But, there are many things that you can do to prepare for it and make sure it goes smoothly. Don’t let your fears keep you from making progress and enjoying your retirement.
Keep in mind that you have to be mentally strong in order to overcome any type of fear. So, start preparing for retirement now and make sure you stay positive throughout the process!
If you want to get more insights and tips like this, come visit HandyWork!