Are you ready for a long retirement?
You must’ve wondered whether you would be able to live your life to the fullest after retirement? Along with this might be a worry whether you will have sufficient money to do all that which you want to do and/or could not do while in service. While armed forces retirees have one less worry since they will get a good pension which is good to survive well (but maybe not to splurge), what about their children in the corporate who will not have that luxury?
A long and healthy life is a blessing if you have enough money set aside for your golden years. To avoid running out of money when you need it the most, retirement needs to be carefully planned. Generally, at younger age when one is headlong into the job and the many financial responsibilities such as buying house, marriage, kids and other expenses take precedence, retirement planning lags behind.
Retirement planning is not only about money accumulation but living a life of one’s choice, post retirement. That can happen only when retirement planning is started early in life. People generally make the mistake of waiting for too long to begin and thereby falling short of time for sufficient retirement corpus required for smooth post-retirement life.
Things to do before retirement –
Estimate your retirement expenses – One needs to estimate his/her post retirement expenses as some expenses, such as health care, may be higher later in life, while others, such as children’s education or lifestyle costs, may decline/vanish.
- Start saving early – The sooner you begin saving for your retirement, the lesser you will have to contribute and lesser worry about it in the later part of your life.
- Consult a financial planner – Financial Planners can help you choose suitable investment instruments, provide regular investment advice, suggest course-corrections and help you build a corpus that meets your needs.
- Create an Emergency Fund – An emergency fund helps you tackle the unexpected financial blows of life so that you do not dip into your retirement corpus.
- Review your Assets and Liabilities – One should properly analyze his/her assets and liabilities, plan them and thus limit the liabilities in post-retirement life.
- Adequate Health Insurance – Make sure that you have adequate health insurance as it becomes more important as you grow older. For armed forces retirees it may not be a major concern, but for their children and parents, it may be a major issue.
After years of hard work, you are certainly entitled to a joyful retirement. A proper retirement planning leads you through this path of your post-retirement journey.
Always remember – the earlier you begin, the better off you will be when time comes to slip into Golden Retirement.
(Contributed by Yogesh, Associate Financial Planner, Team Vikrant, Hum Fauji Initiatives)
Build your emergency corpus when the going is good
We do not start digging the well when we are thirsty. A student studying just before the exams will not be able to crack it – even if he/she manages to pass, it won’t add on to his knowledge base significantly.
In your financial planning too, it is always advisable to start investing early to realize your goals in the desirable manner, lest you are left with compromises and regrets.
You definitely won’t like to compromise with your critical goals/responsibilities like Children’s education, Children’s Marriage and a house for yourself. In fact, why only critical goals, you have a right to fulfill all your lifestyle goals like vacations, golf, spoiling your grandchildren and many more to the fullest extent.
Some investors do start early but they are not aware about the right tools to be used to dig the well. Hence, despite starting early they are unable to achieve their goals and remain thirsty!
It’s advisable to follow Do it yourself (DIY) approach only when you are 100% sure of your capabilities, else you must approach a competent financial planner. Disciplined investing under the guidance of a professional financial planner will help you achieve your goals with less pain and the way you want them to.
(Contributed by Prateek Rediwal, Associate Financial Planner, Team Prithvi, Hum Fauji Initiatives)
Like in life, a balance in investing is also necessary
Nature works in balance. Day and night, sorrow and happiness, right and wrong, and many more such things follow each other. Nights and sorrows might appear to be bad but they actually are the reason of happiness. If there’s no night, people won’t realize the importance of day, brightness and sunshine.
Now, let’s look at another dimension.
Balanced Diet is always recommended. Proteins, Carbohydrates, Vitamins, Calcium – everything should form a part of your diet – you cannot consume only paneer just because it is a rich source of protein.
You may ask, how is all this related to my investments?
Investors keep on striving for equity (like paneer!) considering it as a rich source of returns and underestimate the relevance of debt/fixed income products within their portfolio. If one does so, then the much-needed balance in the portfolio would be missing.
They need to understand that if your digestion system is sensitive, then you might have to avoid paneer from your diet too.
Always invest as per your age, risk appetite and goals. The diet of a wrestler, a cricketer and an office-goer cannot be the same.
Ups and downs in the market shows that the market is alive. Don’t be anxious about that part. Inhaling and exhaling is normal – that is how life moves ahead. Just stay disciplined within your life’s parameters and investments to live happily ever after.
(Contributed by Ayushi Gupta, Associate Financial Planner, Team Arjun, Hum Fauji Initiatives)