Financial planners advocate the benefits of starting with a retirement plan right from the time we initiate our professional career and our bank account starts getting credited every month. But these valuable advices usually fall on deaf ears as people don’t pay much attention to retirement planning unless they reach their 50s. It’s more like participating in a marathon sprint and trying to strike gold only in the last lap. You can very well understand the absurdity of this whole situation which is why it beneficial to start easy if you wish to reap the lucrative results in your golden age. Today we are going to take you through some pre-retirement planning tips which is bound to usher in prosperity as your hair starts greying.
- Having A Term Insurance In Place – None of us want our loved ones to face a financial crunch even in our absence. This is why it is imperative to have an insurance policy in place before you cross over the age barrier of 30. The sum assured needs to be minimum 10 times of the proposer’s annual income to help his family in dealing with loans, rents and child expenses. Best retirement plans for individuals make it imperative to have a hefty sum assured for catering to the family members of the policyholder even when the latter is not around.
- Signing Up For Best Retirement Plans – People belonging to the age bracket of 25-30 need to allocate 60% of their funds in equity and 40% in debt while planning for their retirement. You can easily expect a handsome return of up to 15% by investing your money in the equity market over a long horizon of 20-25 years. However, your share of equity needs to diminish with increasing age and the changed equation needs to be more like 30% of equity and 70% debt after crossing 40.
- Being Wary Of Inflationary Trends –Inflation has a crucial role to play while undertaking retirement planning steps as the corpus saved by you today might not sustain you 20-25 years from now in absolute terms. Hence it is imperative to seek out the assistance of a retirement consultant who might point you towards a term plan which undergo a yearly increase in sum assured.
- Buying The Right Health Cover – Retirement savings companies advocate having the right health insurance policy from an early stage of your life as in this way you can reduce the burden of paying a hefty health insurance premium. The dual forces of growing age and deteriorating health conditions can bury a deep hole in your pocket making it imperative to have a proper plan which can cater to your medical requirements post retirement.
- Getting Rid Of Outstanding Debts –The retired phase of your life needs to be filled with self-devotion as you unleash new talents in singing, painting or even while participating in philosophical discussions. In such a scenario, the last thing you would want is to get caught up in the cycle or rent and loan payment. A retirement mutual fund can be of considerable help in buffering you from all these if entered into at the right time for leading a debt-free post retirement life.
Our sources of income become limited post retirement which is why is it necessary to have a personal retirement plan in place for having a regular income flow even after retirement. The insightful tips lined out above can assist you in making the most out of your golden age and enjoying retirement in peace.