Akshey and Rashikaalways believed in living in the moment. All that they earnedwent into shopping, travelling, outings with friends and what not. All was well until it was timewhen they both had to retire from their respective jobs. The savings were not enough to last for even two years, keeping the current lifestyle in mind. But, it was too late to correct the mistakes,andthe easygoing couple was in a tiff.
Most of us can relate to the story of Akshey and Rashika as we have seen friends and relatives having a hard time managing their finances after retirement. All this happens due to lack of proper planningand many times because of poor investment choices.
Keeping that in mind, let’s take you through mistakes that most people make when planning their retirement.
Not Starting Early
One of the major mistakes when planning retirement is not making an early move. What people don’t understand is that the years they lose while procrastinating leaves them with a smaller time frame to build the corpus. The trick is to start early. Because, the earlier you start,the more time you have in hand to build the money. It isa wise idea to give time for the money to grow and leverage the advantage of compounding.
Not Thinking of Inflation
To build a substantial retirement corpus, many things need to be keptinto consideration – one being inflation. It is one of the most critical factors that can take a spin on your projected amount. Not keeping inflation and the depreciating value of money in future can leave you with no income support at an age when you should just be relaxing and having the time of your life. So, while calculating the future expenses always keep inflation in mind.
The right step to take here is to choose investmentplansthat keep pace with inflation for a worry-free retirement.
Not Making the Right Investment Choices
For a financially secure retirement,it is crucial to make informed decisions and choose investment instruments that offer a maximum return. Allocating money to various investment options is challenging and tricky at the same time. Hence, it is vital to pick the right investment options. You can seekadvice from finance gurus for prudent and equitable distribution of the money in retirement plans. This will help build a defensive portfolio. It is always a good idea to seek expert advice before you put your hard-earned money anywhere in the market.
Not Taking a Sufficient Health Coverage
With age, the medical expenses also rise,and your health starts deteriorating. The last thing you want is totake money out of your retirement corpus for medical emergencies. To tackle such extra expenses with ease, having an adequate health insurance cover is important. The key thing to note here is thatyour premiums increase with age. Therefore, a wise thing to do is to get health coverage when you are still young and keep growing the insured amount every year during the time of renewal.
Not Assessing the Retirement Budget
Careful evaluation and proper budgeting of the amount you will require after retirement is an important part of the planning process. The savings should be enough to sustain the present lifestyle. Furthermore, it is also important to keep in mind life stages such as child’s marriage and higher education when planning the retirement corpus. Having a clear idea about everything will help you asses the corpus that you need to work towards from an early age. If you are unable to decide the amount, either use a retirement planning calculatoror seek professional advice to accumulate sufficient funds for worry-free old age.
Not Keeping an Eye on the Retirement Plan
So, the pension calculator or the professional has given you an estimate of the retirement fund,andyou know the investment instruments that will work well in your case. However, don’t forget to eye on the growth on a regular basis. Keeping track of the retirement plan is essential.The world of investment is just like weather – there are both sunny and rainy days. Keeping the retirement plan updated continuously will help you build an umbrella that will keep the corpus protected from unexpected rain.
After working hard for years, everyone deserves a worry-free retirement. So, avoid these mistakes, choose pension plans from reputableinsurers and give yourself the gift of a happy and tension-free retirement.Insurers like Future Generalican not only secure your retirement years by providing you with a large corpus but also help you in saving tax.
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