Many Filipinos think retirement marks the end of their financial journey—the point where you stop working, start withdrawing, and live off your savings. But according to Christopher Cervantes, a Registered Financial Planner (RFP), this mindset is one of the biggest risks retirees can make.
“In reality, retirement is not the finish line of investing,” Cervantes said in an interview with Financial Adviser PH. “It’s a new stage that requires constant adjustments. Your portfolio doesn’t stop growing the day you retire, and your strategy shouldn’t stop evolving either.”
The Danger of Extreme Choices
Retirees often make one of two mistakes during inflationary times: keeping too much cash or chasing high-risk investments. Both approaches, Cervantes explained, can backfire.
“Holding too much cash feels safe, but inflation erodes its value,” he said. “On the other hand, jumping into risky investments in search of higher returns can expose you to losses you may not have time to recover from.”
Instead, Cervantes recommends finding a balance. Rising interest rates, for instance, have made certain fixed-income placements more attractive. At the same time, maintaining some exposure to equities allows retirees to benefit from long-term market growth.
Diversification Still Works
Even in retirement, the age-old principle of diversification remains relevant. “Spreading your money across different asset classes ensures that no single shock can wipe out your portfolio,” Cervantes explained.
This means retirees should continue reviewing their portfolios, reallocating where necessary, and making sure that assets are aligned with their needs. “The key is to match your investments with your goals and time horizon,” he added. “Even in retirement, you still need your money to work for you.”
Delay Can Be a Powerful Strategy
For those nearing retirement, Cervantes suggests considering one often-overlooked option: delaying retirement itself. “Even a few extra years of work can make a big difference,” he said. “Not only do you continue earning income, but you also delay withdrawals, giving your portfolio more time to grow.”
The same applies to Social Security. In the Philippines, workers may claim benefits at 60, but waiting until full retirement age can increase monthly payouts significantly. “Delaying benefits is like giving yourself a built-in raise for life,” Cervantes noted.
The Value of Professional Guidance
Even the most well-prepared retirees can be caught off guard by inflation and shifting markets. This is why Cervantes stresses the importance of consulting a financial planner regularly, even after retirement begins.
“The economy is dynamic. Prices, interest rates, and market conditions are constantly shifting,” he said. “A financial planner can help you review your plan, run scenarios, and adjust your strategy so you’re not blindsided.”
A Shift in Mindset
Ultimately, Cervantes believes thriving in retirement is less about predicting the economy and more about being adaptable. “You can’t control inflation, interest rates, or market downturns,” he said. “But you can control how fast you shift your mindset and strategies.”
The Bottom Line
Retirement doesn’t mean your financial journey is over—it’s simply the next chapter. By avoiding extremes, diversifying investments, delaying retirement when possible, and seeking professional guidance, retirees can stretch their portfolios and maintain financial dignity.
“Your goal is to make your money last longer than your life,” Cervantes concluded. “And that’s only possible if you continue planning, even after you stop working.”
