How Much Do You Need for Retirement

Many years ago, when I started working I already started thinking of my retirement. Thanks to a book Simplify by Bro. Bo Sanchez, it taught me well on how to prepare for the future especially retirement.

I’ve become really frugal since then. But then, I’ve realized that saving is not enough because of inflation. If I tried to save everything up on the way to retirement, inflation would just eat up most of my money.

So the search for better strategy is on.

Along the way, I’ve met International Marketing Group that teaches strategies and concepts about personal finance. Also, the community really helps because there’s a lot of encouragement and mentors that would guide you to be disciplined, not just in saving but also in investing.


Here, when it comes to retirement we teach the 10/20 rule.

Meaning, you should have 10 times of your annual income for your protection and 20 times of your annual income for your retirement. 

Let me explain further, if you are living on a Php 200,000 per year. Then you should have Php 2,000,000 life insurance for your protection and Php 4,000,000 for your retirement. (Math is easy, right?)

Focusing on the topic retirement, let me explain how the 20 times of annual income was computed. It is a computed using the Rule of 72 and of the average inflation rate in the Philippines which is 3 – 4%.

72 divided by 3 = 24

Rule of 72 is used to compute the years when will the money will be doubled or get into half.  It is by dividing the percentage rate of return  or inflation rate. 

Assuming you are 25 years old and you want to retire at age 60.

The computation above was when will inflation get your money in half. So adding your age and the 24 years when inflation eats up half of your money. The result would be at 49. You are 49 years old and when you saved Php 1M by that time, it’s value would be at Php 500k today.

So you need to at least double the amount of your savings by that time to make it still intact and get the desired amount you need for you to retire comfortably.

In the example above, you are living at a Php 200k per year. That means you need to have Php 4M to still have the Php 2M value that you desired to live comfortably for your retirement.

If you invest that Php 4M at a 10 – 12% per annum rate of return investment. You would get Php 400k/ year that is valued at Php 200k today.

It’s a lot of numbers, I know.

But that’s just one way of computing it. Computing for your retirement depends on you. It depends on the level of your standard. If you think that you could still live in the same way as you were 30 years ago, then this computation would really do.

Just consider a lot things, like your medical needs, taxes, mortgage or the economy in general. The computation is just a benchmark, the higher amount, the better.

So that’s it, the 10/20 rule for your protection and retirement. Build it as early as possible because it’s for the most expensive days of our life.

PS. We are advocating Financial Literacy, teaching people around the world how to achieve their financial goals. Get financial coaching and join a community that encourage saving and investing. Attend our FREE Personal Finance Seminar. Register here.

PS2. Do you want to gain Financial Wealth and Spiritual Abundance at the same time? Join the Truly Rich Club.












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