Smartly plan your retirement
PROCRASTINATING SAVING FOR retirement is a reason that early retirement may seem like a luxury. However, if you avoid some key mistakes a good retirement is not so far
|Smartly plan your retirement|
A standard retirement period is usually 15-20 years. That’s how long you will have to survive without a steady source of income. The definition of retirement has changed from relaxing and sitting idle to people finally chasing their dreams and fulfilling their passions in life, without having to worry about their savings.
Here are some mistakes to avoid and ensure you live with continued passion towards life: Not planning early enough: People are so busy with their lives that they only tend to concentrate on things that affect them in the present. People tend to procrastinate saving for their retirement since an early retirement is considered a luxury. Most people only start to think about it in their late 30s or 40s, by when it becomes too late, with a lot of other financial responsibilities such as a home loan or children’s marriage piling on.
Buying a lot of policies: There are people who claim to have bought 14 or 15 or even higher number of insurance policies for their retirement. Being a collector of policies would not help you to retire. You must try to learn the concept of life insurance and buy a term life cover. The insurance cover should be enough to take care of your dependents’ financial expenses until someone else starts earning in the family.
Ignoring the inflation rate: People tend to neglect the effect of inflation on their retirement savings. However, it is one of the biggest financial risks to your retirement goal. If you don’t fall under the ‘higher income retiree’ category, then there is a big chance that it is going to affect even the most basic essentials in your life, such as food, medication, and other factors.
Not estimating life expectancy: Investors usually end up targeting a big round figure for their retirement kitty. However, some of these individuals do not take into account life expectancy. What if your huge corpus does not last long enough to support you till your life? It will be a grim situation. Remember, retirement is the only goal for which you cannot even take a loan.
Not choosing the right government and private schemes: Apart from only focusing on primary matters, it is equally important to save an adequate amount for old age. After all, everyone wants to tick off their bucket list or re-plan the missed holidays during their retirement period. Prices of day to day items are only increasing and money that we think has a high-value denomination today is only becoming a mediocre sum by tomorrow.
Not reviewing your retirement plan periodically: Formation of a retirement plan isn’t of any use if it’s not implemented and reviewed properly. It should not be taken as a onetime activity as it requires periodic reviews. Since retirement plans are long- term plans, sticking to one single strategy would result in a filtered output. Any event in life which affects your finances and savings pattern will require an alteration in your investment strategy. So always review your plan of retirement, after all, it’s your money which matters.
Smartly plan your retirement