How will your retirement life look like? Have you thought anything about it? Most of us would give the answer in No. Most of us believe the idea of living in the present time and therefore, we end up ignoring the future. We splurge on things, and retirement planning is most often left for people above 45 or 50 years.
According to the United Nations World Population Prospects, the 60-year segment in India is expected to reach 323 million by 2050. With increasing life expectancy and inflation rates, it becomes imperative to support one’s sunset years. Ensuring that your life remains comfortable, and all your family expenses are covered in the absence of regular earnings are the primary reasons saving for retirement is so essential.
Here are the steps you need to follow to help you prepare for your golden years.
First Step: Decide on what kind of life you want to live after retirement
The first step will obviously be figuring out how much money you’ll need to sustain your needs after retirement. It might include your housing requirements, your family needs, and other liabilities that might crop up without issuing an alarm. There are lots of different options for when you retire. Some people will want to get the Alexandria Moving Company to move all their stuff to a nice new dream home they can live their golden years in. Others prefer to stay where they are, close to family. Some even spend most of their time on cruises! It all depends on where you want your future to be.
Every individual should opt for a few investments that’ll shoulder the financial burden during the tough times. If you have plans to work even after your retirement, or have access to other government benefits, you must consider them as well because they’ll only be added to ease your life.
Second Step: Determine Your Expenses
The next logical step is to chalk out all possible expenses. You can start with your current expenses or payable taxes and accordingly judge what you’ll be paying for the same in the future.
Some expenses like healthcare might rise significantly as you age while your taxes might come down. You might probably be done repaying loans too before retiring. Everything that you now pay for will greatly determine your retirement plan. A great way to draw an estimate would be to use online retirement calculators to calculate your retirement corpus.
Third Step: Estimate your corpus
After assessing your sources of income and the possible expenditures, you should determine if you’ll have enough funds after retirement, and if you need to add more to the corpus that you have saved. If not, you could potentially have a look at some different forms of equity release, as this could be a valuable form of income for your retirement journey.
There’s no need for despair if the figures are worrying as you’ll have time to work on your income, expenditure, and the perfect retirement plan.
Fourth Step: Do the Right Retirement Planning
To enjoy a steady retirement life, it is important to invest in different instrument options. You should invest in PPF since it is a safe instrument; transfer the EPF instead of withdrawing it when switching jobs. And in addition to this, buy a ULIP retirement plan like ICICI Pru Easy Retirement Plan. It is because ULIP plans give you the option of investing in equity and equities give good returns over the long term. At the same time, you have the option to switch to debt funds, if required.
Fifth Step: Don’t dip into your retirement savings before the retirement
A successful retirement planning calls for loads of discipline. One aspect of discipline is the systematically keeping aside the money towards retirement. Another aspect is that you should value your retirement corpus. It means that every time you are confronted by any financial emergency never rushes to withdraw money from your retirement corpus. Of course, if there is no other way out, you can withdraw money from your retirement corpus, but make sure you put the same amount whenever your financial condition gets improved.
Sixth Step: Buy right insurance policies
Make sure to buy a comprehensive health insurance at a young age to enjoy low premium rates. Further, keep increasing the sum assured regularly and renew the policy. Besides this, you should also build a separate healthcare contingency fund to cover daily expenses of medicines along with regular health checkups. Similarly, if you are planning to work even after retirement, you should go with a term insurance plan that comes with critical illness benefit. In case the policyholder diagnoses with a critical illness, the insurer will make a payment that can be utilized to meet medical expenses and other household expenditure.
Being financially acute during your retirement will help you and your family lives a comfortable and independent lifestyle. It is a crucial milestone in your life and planning for it which is a long run process, should not be left for later stages of your life. The key to successful retirement planning is starting early, choosing right investment options that not only grow your corpus, but also protect it from the uncertainties of the market.