Retirement planning is essential with an increase in life expectancy and the rising rate of inflation. It is a major financial responsibility that one must perform. Those who ignore, have much to rue it at their later age when they outlive the flow of money in the bank or run out of savings.
However, to ensure a secured life for yourself and your family, it is a must to go for the right retirement plan. By investing in a diverse range of investment assents, you can ensure a financially secured retirement. In this regard, below are some tips that ensure a perfect retirement planning. Here you go:
Plan early
It’s better to plan for your retirement days as early as possible. Right from the moment, you start earning, spare some money per month for rainy days. Also, over time as your monthly drawn income increases, hike your contribution towards a retirement fund.
Investing in equities is a good option
As per the research over time, investment in equities can add significant value to your investment portfolio. Higher returns can be ensured than other assets such as fixed deposits, property, gold, bond etc. Hence, while planning your retirement days, make sure you invest in equities. In this regard, you can consider various ULIP plans, equity funds or stocks.
Keep your options open
Don’t limit yourself with options when it comes to investing for this golden phase of life. Equities are good, but considering the different requirements, you can consider investing in FDs, bonds, gold as well. No doubt equities ensure higher returns, but they’re not enough to fulfil all your investment requirements. SO, make your portfolio in a manner that it appears as a perfect combination of all these assents. Together they can help you reach your post-retirement goals and give a weightage to your savings.
Think beyond the PPF
You’ll have to get out of that auto-pilot mindset of thinking your PPF earnings are enough to fund those sunset days. It is true that these contributions are one of the best investment avenues one can ever choose. But there are more options available in the market which also come with good returns. You have more to be done with your investment with the introduction of new-age investment avenues. Considering the rising pace of inflation, these traditional methods are not enough to back your finances. So, plan proper.
Vesting age
Vesting age is one of the important features of the retirement plan. It is the time when you start receiving a pension from a retirement plan. Make sure this age matches your requirements. Some retirement plans come with a vesting age that starts at the age of 40 or so. If you also want to get monthly income after retirement or want that income stream that early, go with these plans. Or you can consider a plan with vesting age 85 years, whatever is suitable for you.
Choose a higher sum assured
Go for a retirement plan that comes with a higher sum assured on vesting age. You can consider other benefits along with bonus and all.
Death benefit: A feature to be considered
Consider a plan with a maximum death benefit. Some plans offer 100% of sum assured as a death benefit in case of the sudden demise of the insured.
Annuity plays an important role
A plan with appropriate annuity option is always the right option. It is important to choose the right option. For instance, the lifetime option that guarantees annuity for certain years regardless of the insured survives or not, where the joint-life annuity ensures pension until the policyholder is alive. After his/her demise, the spouse gets the pension.
Opt for a competitive expense
Opt for a plan with limited charges/expenses. It is always better to spend less on the additional expenses and spare more for the retirement plan. This calls for a thorough comparison of expenses across various options to zero down on the most cost-effective plan.
Take advice for an expert
Financial planning is a crucial decision. You have to be careful about while investing your hard-earned money. Hence, taking advice from a competent and experienced financial planner is necessary. He can handhold through the entire process of planning your money in a manner that it grows to fund your rainy days.
Over to you
Building a healthy retirement corpus can be daunting but if you plan well, it can yield handsome returns to back your golden days. While doing retirement planning, the focus should be a flow of regular income that can meet your regular expenses. Also, make sure the return is greater than inflation.
