It is a golden phase in one’s life, free of obligations and the daily stress of earning a living. But your retirement is only as comfortable as you can make it while you are still employed. Many people fail to plan for their retirement, thus making themselves vulnerable to financial strain once their income stops.
Don’t let this be your story. Here’s how you can retire in style by adopting some simple means:
* Plan for your retirement today.
Sooner rather than later – that should be your mantra for retirement planning. It might seem like it is a few decades away, but the years will pass by in a flash and retirement will soon be upon you. You can use a retirement planning calculator to estimate how much wealth you will need to create (starting today) to have a peaceful retirement. This entails making certain investments every year, saving money, charting out personal and family goals, and spending judiciously.
* Start a retirement savings account.
The next step is to start a separate savings account devoted solely to your retirement fund. You can deposit money from your salary/business in it every month, and also any other income you make from freelance or part time work. Aim only to deposit money in this account, not withdraw from it for any purposes. Or you can invest in a savings plan or fixed deposit, or a mutual fund of your choice to augment your savings.
* Invest in a retirement plan.
A retirement plan is a necessity for all those seeking a peaceful, worry-free retirement. And retirement need not necessarily happen after age 60 – it can even come in your 40s, but provided you have created the means for yourself to retire earlier than planned. A retirement plan is an insurance product that offers a regular stream of income in the post-retirement years, when your job or business income stops. Leading insurance providers offer retirement plans in India – use a retirement calculator to crystallise your goals and find out the best avenues for investing in retirement plans.
* Make suitable investments for other goals.
The retirement calculator helps you visualise year-upon-year expenses towards your retirement goals, while helping you decide how much money must be allocated to other goals like household expenses, children’s education, children’s wedding, etc. You could consider options like mutual funds, gold bonds and child insurance to meet your familial obligations.
* Curb unnecessary expenses and maximise assets.
Another way to save money is to curb unnecessary expenditure. The money thus saved from less shopping or eating out, can be diverted to your retirement plan or savings account. Meanwhile, aim to monetise owned assets currently not in use. If you have a second home that you occasionally visit, you should aim to lease it out for a couple of years to make rental income. Or you can hire out your car to tour operators over the weekdays for a regular stream of income.