Explained below are five mistakes to avoid while planning your retirement.
Retired life is often considered as the golden years of one’s life. It is the time when you have lived your entire life, performed all your responsibilities well and in most cases, you have even ensured a decent life for your children. And now, you can choose to live your life the way you want to!
However, every move we make these days, demand money and retirement years are no exception. In order to ensure that you lead a life of comfort even after 60 or say 65, you do need money. In fact, a lot of it!
Hence retirement planning is highly essential.
However, retirement planning is not just about saving money for the winters, but to ensure that you invest the same money in a proper way, so as to make sure, you have accumulated enough capital.
But, certain glitches can make things arduous and snatch away all your peace during your sunset years.
Explained below are five mistakes to avoid while planning your retirement.
This is one of the gravest mistakes that most individuals commit. Given the current economic conditions, considering the inflation factor is of utmost importance. For example, if you see, back in 1980, simply Rs. 500 would have ensured a month’s household grocery is in place. The same thing in 2019 would cost your at least Rs. 5000. So, now you can imagine the amount of money you would need to accumulated to ensure a secure living post retirement.
While retirement planning is a crucial part of your life, but do not forget other goals, which you have. These include taking care of children, funding their higher education and marriage. Needless to say, these form major goals for every average Indians, and hence proper financial planning about retirement is absolutely necessary.
Generating regular income to secure retirement is of utmost importance. Since income from a typical job or business will come to an end at some point or other, generating regular income from various sources plays a significant role. Experts often opine about investing in annuities to ensure regular income during your retired years. While it’s a fact that income from annuities are not too high and also taxable, nonetheless, at least it will ensure a certain percentage of income post retirement.
As soon as you start earning, in most cases, you and your employer contribute towards employee provident fund. This action is done to ensure a secured future. Needless to say, you and your employer have both worked towards accumulating this wealth over time. Power of compounding will show its magic and help generate a substantial corpus. Avoid redeeming this accumulated wealth as much as you can, unless absolutely necessary.
While 60 is the standard age of retirement in India, many times its seen, individuals continue to remain hale and hearty past the age. Thanks to advances in medical science, not only general health has improved, but life expectancy has also increased to quite an extent. In fact, many individuals remain active even into their early 70s.
Keeping oneself engaged in meaningful activities post-retirement is critical. If you succeed in doing so, and can even ensure some honorarium, life simply can’t get better than this.