4 ways to prepare for your retirement

 

According to a survey, 80%^* of urban Indians aren’t prepared for retirement. Retirement can be a breeze if you prepare well for it. It takes commitment, planning and of course, sufficient money.  Planning for retirement does not start at the time of retirement, but maybe a couple of decades before the date of retirement. Earlier the better. It all starts with identifying your needs, quantifying the amount required to the extent possible, planning to achieve the goals.

Here are a few things to keep in mind.

1. Work towards creating multiple cash flow sources

One of the major problems that you would face is the lack of income source but continued expense to sustain the standard of lifestyle. Hence it is very important that you build assets and investments that generate regular cash flow at the time of your retirement. It is important to create multiple cash flow generating streams. You should ensure that you can enjoy cash flow from fixed deposits, real estate, dividends, and rentals from real estate which can potentially increase year on year at a rate that beats the rate of inflation. You can also explore HDFC Life Pension Guaranteed Plan that provides guaranteed cash flow during retirement.

2. Defer retirement if family’s aspirations cannot be met

Financial goals and aspirations are things in the future and are always subject to change and may require certain adjustments. Therefore, if you feel you need more time to prepare for fulfilling your family’s aspirations then defer your retirement. Do not rush into retirement without proper financial planning and corpus. A lot of times, people face a problem of outliving their own saving corpus because of lack of thought and lack of planning.

3. Start focusing on overall well-being

To enjoy a happy retirement, focus on improving your physical and mental well-being. Post retirement, there can be a surge in your medical bills because of ageing and different medical problems. It is important that you include a lot of health and fitness plans in your retirement goals. You should focus on your overall well-being and hence, it is important to exercise, follow a healthy diet and focus on living a happy life.

4. Ensure you have health insurance

A comprehensive health insurance plan like the Click 2 Protect Optima Secure plan is important as a large part of your expenses during retirement would be towards healthcare. A health insurance plan typically takes care of the medical bills and any heavy hospitalization expenditure. It is important to safeguard yourself against any sudden and unplanned expenditure.

Conclusion

It is important to reiterate that retirement planning means planning and preparing today for what’s in store in the future. It does not, in any way, mean planning at the time of retirement. This includes the end-to-end thinking process from setting your retirement goals, quantifying it and mapping each goal to building an asset that will help to fulfill the goal.

(*Source: https://www.tomorrowmakers.com/financial-planning/80-urban-indians-not-ready-retirement-and-how-they-can-get-there-article)

ARN : ED/10/22/29825