No matter, if you are a couple of years or decades away from your retirement age, but it is very necessary to plan and save something for your retirement, as much as possible in advance. Preparation for retirement may seem a difficult task, but if done appropriately, will make your retirement peaceful and pleasant!
According to the investment experts and different surveys, an average Indian employee are on course to be up to 30% short of the earnings they will require to have their perfect retirement.
Let’s have a look at some general mistakes many working individual commits while planning for retirement and how you can avoid them.
- Not choosing what kind of standard of living you want after retirement
This depends on whether you want the standard of living you have now to be maintained even in retirement. Do you want to eat out often? Go to the watching movie weekly? Go on an international trip every year? Invest in property? If you don’t attempt and picture what you want your retirement to look like, it will be very tough to make a decision how much capital you should aim to save, invest and spend.
The answer is to make a decision how much money you will need. Normally, around 70 – 80% of your current annual income should cover it.
- Saving too small, too late
If possible, you should start saving up for retirement from the very first pay you get. Actually, at the young age, you do not have the heavy burden of loans like car loans, home loans and different types of policies. So, at this particular age, you can give your retirement a gift of savings. The Employees’ Provident Fund (EPF) is the best way to save, as it saves a fixed portion of your salary and also generates an interest rate which is very much higher than fixed deposits. As per the experts’ advice always save at least 30% of your salary.
- Not preparing adequately for economic ups and downs
Assume a product costs Rs. 100 today. At 7% inflation yearly, the same product will cost Rs. 731 in 30 years’ time! It is suggested to save a few percentage points over the price rises mark to your retirement savings computation, pre, and post-retirement to defeat inflation. In the same way, you need to have savings and investments to rely on in case the economy takes a recession, due to which your real estate investments become less gainful or you get laid off from your employment.
- Not getting satisfactory health coverage
Depending on your family medical history and your own health condition, you have to choose the best way to plan for medical possibilities.
Ask yourself three questions:
- Your health is an asset. Have you covered it well?
- Is your health insurance policy adequate to cover you against serious Illnesses such as Alzheimer’s, Diabetes and Cancer?
- Medical treatment in your country – Can you really afford it?
The important thing however is that you take control of your health and never delay getting into shape. To get you started, here are some facts and figures to keep you healthy.
- Not choosing right investment portfolio
Fixed deposits possibly a secure and reliable investment medium, but the interest rates for these deposits can be as small. But in real estate return is very higher, depends on the property, location and the economic condition of the country. Central Park 3 Cerise Suites Sohna a new residential project in Sector 32 & 33 Sohna offering low rise independent floors with world class specifications and facilities at very attractive price.
It is self-evident that you shouldn’t dip into your retirement fund for any other expenditure unless it is very necessary. A good retirement plan will go a long way in guaranteeing a happy and hassle-free retirement for you and your better half, so get started right now.