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Planning an early retirement? These factors must be avoided

Things to avoid while early retirement planning.
July 22, 2023


The investor now a days tend to do retirement planning starting at an early stage of life. People in their 20s or 30s take retirement seriously and contribute a part of income for their retirement. It doesn’t mean that they will retire at 40 or 50 years of age, but they are planning wisely for the golden period. Let’s discuss some key things to avoid major retirement planning mistakes committed generally by investors.

Unrealistic Planning!

Some people plan to retire early, maybe in their 50s or so. But, the sad part is that few efforts are done towards achieving the objective of early retirement. If sincere efforts are not put in to retire early then the lucrative plan might flush down the gutter. Consider, if the investor plans to retire early then he/she must start contributing up to 25% of their monthly income towards retirement objective.

Estimate your life expectancy!

An investor has to make an almost accurate decision for their retirement kitty by planning step by step. Life expectancy has to be calculated to plan in a better way. Because the situation will be worse if the retirement fund ends soon. Remember, there is minimal chance of getting a loan as well.

Inflation factor neglected!

The money will deplete faster as time passes. Inflation plays a big role and can have an adverse impact on the corpus. So, when planning an estimated expenditure, inflation factor must be taken well into account.

Investing in wrong products!

Investors should always list down his/her objectives for investment, long-term goals and other such factors and do meticulous research of the market. Insurance companies have many products which can help the investors in the long run. If the investment is made in a wrong product then it may impact the investor and might create a hindrance in attaining the targets smoothly.

Withdrawing Provident Fund (PF) or other benefits!

The biggest mistake can be to withdraw the PF fund in early years. A part of the salary is contributed by the employer and employee into the PF account. That money must be kept safe. This small investment can do wonders with the power of compounding. Never underestimate these small savings!

Less health coverage!

With increasing age, our body is more vulnerable to diseases. To cover the extra medical expense, a health insurance needs to be taken. Also, the investors should increase the health insurance amount in order to pay for the medical bills in the times to come, especially for the old age. Many companies won’t give insurance after a certain age say 60 or 65, so investor must plan accordingly.

Planned investment of post-retirement income!

After attaining enough corpus for retirement, the funds should be reinvested in a smart way. That corpus will be supporting your life post-retirement. Depending on the need, the money must be invested into different ventures in order to sustain.

Retirement is the golden period! To enjoy it fully, investors must invest smartly.

Related Article:

ARN: ED/07/19/14826

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.