Retirement is the beginning of new phase of life. It sounds quite an easy phase, where you are retired from your official duties and work but is it the end of your responsibilities? Certainly NO- responsibilities never end. What else is certain that your income definitely decreases and your money is not going to last forever without any inflow of cash. Pension facility is limited to some of the Government and private sector jobs and only with a few of the private sector companies. Even if you get a pension that is half of your last drawn monthly salary which is very less comparatively. Hence, planning your retirement is a very important thing to do. It becomes even more important for the non pensioner employees, as those who are not going to receive pension facility they need to plan their retirement very well, as with stopped income, stored money is not going to last forever. After your retirement there are no pay cheques which you receive every month from your company. No pay cheques means no income- and no income means no money. Needs and responsibilities never end and hence it’s your responsibility to plan your retirement for a better life and future of yours along with your family.
To make your retirement easy going without any stress and worries about the finances you need to start your planning and work towards it early. It is always said that “The earlier the best”. But in case you are close to your retirement or even if you have a low income, it’s never too late to start. But it is also a matter of fact that saving for your entire retired life is not an easy task. You need to know correct way and strategically to do so, as just keeping out some money from the monthly income is not going to be enough, you need to have a retirement plan.
Retirement Planning
So if you want to secure your retirement financially, here are the things you need to consider and do:
Estimate Your Retirement Budget
Budget is the most important aspect of any financial plan and for achieving any financial goal. A budget makes you aware about your expenses, overspends and lets you know how much you need, to achieve your goal.
First step is to get an estimate for your retirement budget. To begin with, get an estimate of your current expenditure which should include all the big and small expenses even occasional one which come time to time. However, don’t forget to keep a scope of inflation in your retirement budget calculation. Doing this will help you decide how much funds you will need to run your as usual livelihood post your retirement balancing your personal and family life both.
Increase your Contribution in your PF and EPF account
In order to achieve your retirement financial goal, you need to save more. Savings which you do in your PF and EPF account are generally for after retirement. Your PF is opened at the time you start your job. Initial salary is always low but it gradually increases with time and experience as you proceed forward in your career. To live a financially happy life after retirement you need to increase your savings in these account. Start with the minimal and keep on increasing your contribution in it with increase in your salary. With some companies a fixed amount is deducted and transferred to your PF account. But you can talk with your HR and increase your contribution. Same can be done even with the government employees.
SIP (Systematic Investment Plan) with Mutual Funds
SIP is an investment plan by mutual funds where you can invest money periodically- which can be monthly, quarterly and early. Investment in SIP gives you high interest in return. The interest offered by SIP is much higher than other such investment plans.
The pay cheques stop coming after your retirement, but your expenses won’t. You will need money even after retirement and even there can be some critical add on expenses too like healthcare will be growing faster than the overall inflation. The earlier you start saving for this, more comfortable your life can be financially.
The big question comes here is- how can one save that much? Which can be surplus for life after retirement.
An SIP of INR.15, 000 can grow up to INR. 10 crore in 30 years. And the best part of SIP is that you can start with a low amount of even INR. 500. And it can give you an interest up to 12% starting from 6%.
Suppose you invest INR 5000 per month for 15 years then with an interest of 6% you will be getting 14.6 lakhs, and on interest of 8% you will be getting 17.6% in return at the end of 15 years.
Plan out for your property
Always plan for your properties, be it your dream house or the properties which you would buy for investment purpose. It is always important to plan and buy properties before you retire for an easy and tension-free retirement. Properties are the best for investment as their value keeps on increasing with time. Investing in properties secures your future financially.
Have LIC
LIC is a must to have thing which doesn’t depend on your age. It secures your future of your family even after you. The premiums are not much high and it gives you good returns after the tenure is completed. Generally the tenure of a LIC should be kept high, so that you can save more and this money can help you a lot to live a comfortable post retirement life.
Health Insurance Policy for your Family
Having a health insurance is very important these days. Life is full of uncertainties and major and minor illness are a big part of it. Any one from your family can fall ill or sick and lot of money is spend in paying medical bills and all. In this way a major part of your income is spent in this. Even there can be some big emergency where there can be need of borrowing money from family, friends or even from bank. Having a health insurance covers these kind of uncertainties. The best part of having a health insurance is that the money spent on the health issues is given by the insurance company. In this way you can save a lot. Theses insurances helps a lot after retirement when you don’t have enough fund for your medical issues.
Retirement is a beautiful phase of life but it can be worse without money and when you get dependent on others financially. Takes these steps will secure your post retirement life which you can enjoy as you were enjoying before retirement.
