Wondering where to put your retirement money? Discover the safest options to grow your nest egg and enjoy financial security in your golden years.Retirement is a moment awaited by many: whether it is a milestone reached by age or by years of work, it represents an important turning point that brings with it numerous changes. Among the various things that need to be thought about is the choice of where to credit your pension check.

Preparing for retirement needs is not easy. This is inseparable from the assumption that retirement is still a long way off so it is not an urgent matter that must be met now. This view is somewhat inaccurate. The best time to prepare for retirement is now. The longer you delay it, the less chance you have of realizing a prosperous retirement. So, if you are currently confused about where to start, it’s time to take action starting now by following these 6 guidelines.

Make a clear financial plan

The next step is to create a careful retirement financial plan. What needs to be determined when creating a retirement financial plan is:

• First, at what age do you plan to retire, or no longer have a steady income.
• Second, determine the assumed life expectancy.
• Third, determine the estimated funds needed for daily living.
• Finally, know how much time you have to prepare the funds.

The description is as follows:

You are currently 27 years old and plan to retire at age 60. The assumed life expectancy is 70 years. Your current income is around Rp15 million, where the allocation to finance daily living expenses is around Rp10 million per month. You have 33 years to collect pension funds. If inflation is assumed to be 6% per year, then the pension fund requirement that must be collected is around Rp10.81 billion.

Investing in Indonesia itself has various investment instruments that you can try as a step in preparing retirement funds. Here are some investment instruments that you can understand first:

1. Share

   Stocks are one of the investment instruments that you can use as a post for your pension fund. Stocks are an investment instrument that offers a relatively larger profit profile than other investment instruments. However, the opportunity to get big profits also comes with a relatively high risk profile. For those of you who are hesitant to start investing in stocks to prepare for retirement funds, you don’t need to worry anymore. Because now you can buy stocks with relatively small capital.

   In addition, the regulation of share ownership has also changed from 500 shares to only 100 shares. Even so, you need careful consideration before buying your first shares for retirement funds. You can use the services of a stockbroker to help manage the shares you own, while you seek deeper knowledge regarding managing stock investments for retirement funds.

2. Bond

   In addition to stocks, bonds are also an alternative means of investing to prepare your retirement funds from now on. Bonds tend to provide fixed investment returns according to the interest agreed upon at the beginning of the purchase. So from the capital you channel at the beginning of the investment, per year you will have a predictable profit potential. Bond investments also have various time periods, namely long term and short term. If you choose bonds as an investment vehicle to prepare retirement funds, it would be better if you use a long-term investment time scheme.

   One of the bond products that is quite promising as a pension fund investment is ORI or Indonesian Retail Bonds. It is known that ORI can give you a return or profit of up to around 8 percent annually. If the asset value of ORI increases, you also have the opportunity to receive a profit greater than the 8 percent that has been previously set. The capital you spend in ORI transactions will be locked from two to five years. So, you don’t need to bother to continue managing your investment in a relatively long period of time. In addition to getting benefits to increase the strength of your pension fund, by investing in ORI, you also indirectly contribute to national development.

3. Deposit

   In preparing retirement funds, deposit investment is one of the investment instruments that is often the main choice. This is because deposits offer a fairly stable capital gain compared to other investment instruments. Even so, the returns that will be obtained will not be as large as other investment instruments. Considering that retirement funds are one of the long-term plan projections, preparing financial planning using deposits is considered a relatively safe step in terms of risk profile. Deposits are also like savings, so you can allocate retirement fund capital every month in an amount that is not too large, so you don’t need to worry that the investment you make in preparing retirement funds will interfere with your daily needs later.

4. Mutual funds

   The last investment instrument that you can try in planning your retirement fund is mutual funds. Mutual funds are one of the investment instruments that can offer quite good returns. In addition, you can also choose what type of investment portfolio you want to have in mutual funds as a means of realizing your retirement fund plan.

   You also don’t need to bother managing your mutual fund investments. Your investment management will be run by an investment manager. An investment manager is a professional management or institution that has the task of managing your investment activities. For this case, it is a mutual fund investment. The presence of the role of this investment manager is one of the strengths that can attract the attention of young investors in having investments as a means of planning retirement funds.