Topic 4: Mistakes to Avoid While Planning Your Retirement
There are a few common mistakes that people do while planning their retirement. This article identifies them and helps you to avoid mistakes while doing retirement planning.
Don’t want to retire with insufficient funds?
There’s a secret recipe for retiring with adequate funds so that you can live happily and freely in your post-retirement. Plan strategically to ensure you have more than sufficient funds to enjoy your post-retirement life.
Let’s see how not to end-up retiring poor.
The trick is to plan your retirement without committing these mistakes.
3 Top Retirement Planning Mistakes to Avoid
1. You start retirement planning at a later stage of life
The real benefit of a retirement plan is only seen when you start retirement planning at a younger age than at a later stage of life. The key to doing the right type of retirement planning is to start early and stay invested till your retirement age. The longer the time frame, the longer your money stays invested, and consequentially, your money has more time to grow. This means the wealth accumulated during the period is more as compared to wealth if
Example: If invested at a later stage of life, when you start your retirement planning at the age of 45 years.
If invested at a later stage of life, when you start your retirement planning at the age of 45 years.
As you can clearly see, even when the total amount invested is the same, the fund value is nearly half of the fund value if invested at an early life stage. Tip: Start your retirement planning from an early stage of life to reap the real benefits.
2. You Do Not Invest in Your Retirement Planning Wisely
Choose the right way to plan your retirement. There are many options to financially secure your post-retirement life. However, it is the choice that could definitely play a significant role. Retirement planning with the help of Life Insurance policy is one of the right and safest way to secure your post-retirement financially. You can opt for a dedicated Retirement or Pension plan to do your retirement planning. There are other different types of life insurance policies to help you with your retirement planning. You can choose from ULIP, Whole Life plan, or Retirement Plans.
Tip: Compare different plans and then choose the right type of plan that is suitable for you.
3. You Do Not Consider Inflation into Account
So, you started planning about retirement at an early age; you also chose the right option for your retirement planning. But, while buying the plan, you did not consider the inflation into account. The amount which may seem sufficient may not be adequate years down the line during your post-retirement. Tip: Consider inflation into account when buying a plan for your retirement. If you avoid these common mistakes, you can plan retirement adequately to enjoy your post-retirement to the fullest.
Ways to Enjoy Your Retirement Days
You have spent your whole life working, now is the time to sit back and enjoy life. Here are few ways to enjoy your retirement days
Maintain good health: Health is wealth. To fully enjoy your retirement, it is important to maintain good health. If your health is good, only then you can do other things to make your life enjoyable. Eat healthy to stay fit. Because in old age, the chances of getting ill or injured are more which may also take time to recover. Join a yoga class or do yoga, if possible.
Spend Time With Your Family and Friends: The most beautiful time of your life is when you spend it with your loved ones, i.e. family and friends. It is that time of your life when you can spend ample amount of time with your family and friends. Spend some time with your grandchildren. Play with them and share your experience.
Travel and Explore: There might be many places on your bucket list that you haven’t visited before or perhaps, you wish to visit again. Travel and explore new and old places. This time without any worries about the holidays or the number of leaves taken from work. There’s no place for work even in hindsight.
Avoid simple and most common mistakes while doing retirement planning.
Source: Coverox.com
Don’t want to retire with insufficient funds?
There’s a secret recipe for retiring with adequate funds so that you can live happily and freely in your post-retirement. Plan strategically to ensure you have more than sufficient funds to enjoy your post-retirement life.
Let’s see how not to end-up retiring poor.
The trick is to plan your retirement without committing these mistakes.
3 Top Retirement Planning Mistakes to Avoid
1. You start retirement planning at a later stage of life
The real benefit of a retirement plan is only seen when you start retirement planning at a younger age than at a later stage of life. The key to doing the right type of retirement planning is to start early and stay invested till your retirement age. The longer the time frame, the longer your money stays invested, and consequentially, your money has more time to grow. This means the wealth accumulated during the period is more as compared to wealth if
Example: If invested at a later stage of life, when you start your retirement planning at the age of 45 years.
| STARTING AGE | RETIREMENT AGE | MONTHLY INVESTMENT | TOTAL INVESTMENT | RATE OF RETURN | FUND VALUE |
|---|---|---|---|---|---|
| 30 | 60 | Rs.2,500 | Rs.9 lakh | 8% | Rs.35 lakh approximately |
If invested at a later stage of life, when you start your retirement planning at the age of 45 years.
| STARTING AGE | RETIREMENT AGE | MONTHLY INVESTMENT | TOTAL INVESTMENT | RATE OF RETURN | FUND VALUE |
|---|---|---|---|---|---|
| 45 | 60 | Rs.5000 | Rs.9 lakh | 8% | Rs.16 lakh approximately |
As you can clearly see, even when the total amount invested is the same, the fund value is nearly half of the fund value if invested at an early life stage. Tip: Start your retirement planning from an early stage of life to reap the real benefits.
2. You Do Not Invest in Your Retirement Planning Wisely
Choose the right way to plan your retirement. There are many options to financially secure your post-retirement life. However, it is the choice that could definitely play a significant role. Retirement planning with the help of Life Insurance policy is one of the right and safest way to secure your post-retirement financially. You can opt for a dedicated Retirement or Pension plan to do your retirement planning. There are other different types of life insurance policies to help you with your retirement planning. You can choose from ULIP, Whole Life plan, or Retirement Plans.
Tip: Compare different plans and then choose the right type of plan that is suitable for you.
3. You Do Not Consider Inflation into Account
So, you started planning about retirement at an early age; you also chose the right option for your retirement planning. But, while buying the plan, you did not consider the inflation into account. The amount which may seem sufficient may not be adequate years down the line during your post-retirement. Tip: Consider inflation into account when buying a plan for your retirement. If you avoid these common mistakes, you can plan retirement adequately to enjoy your post-retirement to the fullest.
Ways to Enjoy Your Retirement Days
You have spent your whole life working, now is the time to sit back and enjoy life. Here are few ways to enjoy your retirement days
Maintain good health: Health is wealth. To fully enjoy your retirement, it is important to maintain good health. If your health is good, only then you can do other things to make your life enjoyable. Eat healthy to stay fit. Because in old age, the chances of getting ill or injured are more which may also take time to recover. Join a yoga class or do yoga, if possible.
Spend Time With Your Family and Friends: The most beautiful time of your life is when you spend it with your loved ones, i.e. family and friends. It is that time of your life when you can spend ample amount of time with your family and friends. Spend some time with your grandchildren. Play with them and share your experience.
Travel and Explore: There might be many places on your bucket list that you haven’t visited before or perhaps, you wish to visit again. Travel and explore new and old places. This time without any worries about the holidays or the number of leaves taken from work. There’s no place for work even in hindsight.
Avoid simple and most common mistakes while doing retirement planning.
Source: Coverox.com