By Jenn Simons

As a hypersocial adult who’s been stuck at home on a reduced income with the possibility of a medical emergency looming, the last few months have felt like practice for retirement life. It really made me think about my retirement savings plan (or lack thereof).

If I’m honest, the term “saving for retirement” makes me think of sitting in front of the TV with achy joints, counting the number of pills I need to take with my next fiber-rich meal. That’s understandably difficult to get excited about preparing for.

But these days, retirement has had a glamorous makeover. My retiree friends are protesting coal plants, starting restaurants, and traveling across America in RVs. Retirement is no longer REsting for the TIRED, but a “re-tire”: the changing of wheels on your life’s vehicle so you can do what you want to do (instead of what you need to do).

That’s the kind of future I would love to start building for myself today—once I spoke with Ton Patron about retirement for the Level Up Podcast, I understood that saving for retirement is building long-term wealth. If it had been called “investing for the future,” I probably would have started saving and investing sooner!

Disposable income

Now that I’m excited about building long-term wealth, my guru on personal finance tells me that I need to ask: How much disposable income does the entire household have? That’s the amount we have to allocate to our financial goals.

“We want to change the equation from “income minus expenses = savings” to “income minus savings = expenses,” says Ton, head of fin tech for Sun Life Philippines. 

The best time to start saving is with your first paycheck, but you could build a retirement fund over 20 years. “Once you have that discipline of putting money aside every month, you can manage your investment portfolio with a glide path,” Ton tells me.

A “glide path” is financial advisor lingo for reallocating your investment funds every five years. The longer the time between today and retirement, the higher the level of risk your portfolio can withstand. As you reach close to the end of your timeline (when you want to use the money), your investments should become less aggressive and more of your funds should be in safer investment instruments.

Portfolio factors

Ton avoids giving specific tips on what your portfolio should consist of because there are so many factors: your risk profile, your other goals, and when you will need the money, among them. But when pressed, he went into some further detail for us:

“Let’s say you start this 20-year plan to build your retirement; you start at 90% investment on stocks and 10% on bonds/money market instruments … on the 5th year, you can shift your total investments to 75% in stocks and 25% in fixed-income instruments. Then by the 20th year, you keep only 10% in stocks, 20% in money-market funds, and the rest in fixed income just for safety.”

Fixed income investments are government securities, corporate bonds and fixed-rate treasury notes. These offer a steady stream of income with little risk.

Investment as expense

Savings and investments are terms that are used interchangeably … although the reduced income makes it challenging to find the money to put aside right now, it is possible. A little plus a little plus a little does add up to a lot!

Just keep this Patron-ism in mind: “Treat your investment as a monthly expense that you’re using to buy your future.”

Hear our full conversation on spotify and reach out to Ton Patron for further advice. You can also click through to investopedia for a guide to managing your savings so you can live the life you want to in the future. Your 80-year-old self will have a lot to thank you for!

The author manages branding for a top funded “tech-for-good” startup and produces the employee wellness podcast “Level Up.” She is a mental health advocate, connector and communications coach. Connect with her at  https://www.linkedin.com/in/jennsimonscastillo/

This article first appeared in OpinYon weekly.