A happy and fulfilling retirement means different things to different people. Once you determine what will give you peace of mind in retirement, it’s important to know how you can get there financially. There are some simple steps which will help you in this venture. Retiring on time and living well are not conflicting goals, so long as you maintain a strong sense of the realities of financial planning in retirement. It’s not about “getting by” but effectively using the resources you have to make the best choices along the way to make new financial goals and plan how to achieve them.
Financial planning is more than just saving for retirement it’s about helping you protect what matters the most while planning for your short and medium-term goals. If you want financial independence even after your retirement, you need to plan well in advance. Planning should be done in such a way that you can easily meet your medical expenses and living expenses. Also, make sure that post-retirement you have protected your wealth so that you may not lose what you gained during pre-retirement. During your earning years, make sure your investment decisions are well thought of. Remember, every penny saved is a penny earned. So, you should consider investing in long-term instruments. You can consider ULIPs to invest systematically so that you can build up a huge corpus by the time you retire. Moreover, they provide good returns, life-cover, and tax-saving benefits.
All in all, retirement planning is a long process. The earlier you started, the better it is. When you are young, your risk-taking capacity is high, which allows you to earn a higher rate of return. This is the time when you can start building a corpus for life after retirement.
For instance, if you start saving at 30, you will easily have 30 years to build your corpus. At 30, Rs 5,000 invested every month will grow up to Rs 75 lakh (assuming 8 percent compounded annual growth rate) by the time you are 60. If you start at 40, you will have just Rs 30 lakh at retirement. A delay of 10 years will halve the corpus. Always remember that it is unwise to dip into retirement savings. Plan for your other needs systematically.
Also, individuals should get rid of all debts before retirement so that it does not eat into the corpus. Lastly, write a will so that your assets are protected. Issue a power of attorney to a confidante who can manage things on your behalf if you fall ill. Investing at this stage is like a trivet which requires a balance of liquidity, growth as well as regular income.
But it’s unlikely you’ll have the time to learn everything you need to know in these different areas. That’s where professional expertise can be incredibly valuable to you. A good financial advisor will really listen to you, help you with your planning, and provide advice based on your concerns so that you can live your sunset years independently without financially depending on anyone.