The worry-free way to an enjoyable retirement | Inquirer Business
Money Matters

The worry-free way to an enjoyable retirement

Question: What is the best way to invest when I am old and gray and all I want to do is enjoy life to the fullest? I would like to be able to travel, pursue my hobbies, play with my children and do civic work without a care in the world. Asked at “Ask a Friend, Ask Efren” free service at, SMS, Viber, Twitter, LinkedIn, WhatsApp, Instagram and Facebook

Answer: A lot of people dream of a long, healthy and comfortable retirement. But to many, that may mean having to continue investing actively even after retirement.


The good news is that with a solid comprehensive financial plan, you may still enjoy a long and relaxing retirement with little thought to your investments. This is where bonds come in.

By their very nature, bonds are suited for earning periodic income while getting back your investment upon maturity. All you need to do with your financial planner is to match the interest payments and maturity of the bond with your cash flow needs in retirement.


If you expect to have, say, a 20-year retirement period for example after retiring at the age of 60, you may structure your bond placements so that you get equal amounts of bonds maturing every year.

If you expect to have a retirement where you spend a lot on enjoying retirement at the start, then mellow down in spending for a few years, and spend a lot again toward the tail end of your retirement because of increased medical expenses, you may want a barbell bond portfolio.

Just like a barbell, you will have more maturities at the start and end of your retirement with fewer maturities in the middle. The two ends of the barbell need not have the same level of maturities. Maturities can be more toward the start or the end of your portfolio. Again, a solid comprehensive financial plan can help you structure your portfolio.

Of course, you may be more active with your bond investing by letting your views on macroeconomic factors determine your bond maturities. However, this may not be the carefree retirement you are looking for.

But whatever the bond strategy, it is important to note that you are making the bond issuers, whether they be the government or private companies, pay you periodic interest and eventually the principal you invested so that you can enjoy your retirement without so much as metaphorically lifting your finger.

So, is bond investing the worry-free way to an enjoyable retirement? Not entirely.

The worry-free way is opening a trust account that contains bonds and then working with your account officer to structure your portfolio according to your retirement needs. And even if you want your portfolio to be active in investing, it is not you but the trust bank or company that will actively invest for you.


You can also use the trust for estate planning purposes. One example is to open a trust for your heirs with the condition that while you and your spouse are alive, you both get to enjoy the income on the trust. Only when both of you are gone will the trust be entirely for the benefit of your heirs. There are, of course, more details to consider. That is why it would be best for you to talk to a trust practitioner who may be found in banks, trust corporations, investment houses and even stock brokerage firms.

What is important to know is that your long career would have earned you the much-deserved rest and relaxation. And one worry-free way to enjoy it is through a trust account invested in bonds.

Efren Ll. Cruz is a registered financial planner of RFP Philippines, seasoned investment adviser, bestselling author of personal finance books in the Philippines. Become a Yaman coach. For details, email [email protected] To learn more about personal financial planning, attend the 91st RFP Program in September 2021. To inquire, e-mail [email protected] or text at 0917-6248110

Copyright 2021 Efren Ll. Cruz, RFP. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without the prior written consent of the author.

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