5 Things to Avoid While Investing For Retirement
There are a lot of factors which decide what sort of coverage will be ideal for you and your dependent family members after your retirement. However, there are certain mistakes that professionals commonly commit while planning their retirement. Below mentioned are five major factors that you must avoid while investing for retirement:
- Delayed approach: A timely decision is the best decision. Ideally, you must start planning for your retirement in the early stages of your career because this will allow you a proper term in years to build up and retain a sufficient coverage for your golden years. Therefore, it is important that you take a timely decision and start saving as soon as you are in a position to do so.
- Not choosing the due sum assured: Sum assured is the amount of funds that you will be entitled to when you retire. You must carefully choose the total sum coverage that you require post retirement in order to avoid being underinsured. For this, it is important to carefully list out your specific requirements and match them with the sum assured as per the retirement plan that you wish to choose.
- Not considering the inflation-factor: This is one of the most common mistakes that people make while planning for the future requirements. While choosing the coverage scope that you wish to avail, it is very important that you take inflation into consideration. Inflation is the general increase in prices over a period of time and reflects the cost of living index that will be in vogue after some decades. For any proper retirement planning, it is very essential that you consider this factor carefully.
- Wrong investment choices: Investment choices may be either equity-based, high-risk options or debt-based, low-risk ones. When you choose an investment option, ensure that it is as per your risk-appetite and the time-period that you have in mind for specific financial goals. Any unplanned decision can severely impact your financial freedom.
- Not having a balanced portfolio: You must equally invest in debt and equity fund options and not take a one-sided approach to investment. This will ensure that there is optimum fund growth and a durable financial reserve is created by the time of your retirement. Therefore, you must aim for a balanced financial portfolio.
HDFC Life offers various pension and retirement plans that seek to secure optimum benefits for your retired life. For details, click on the mentioned link: https://www.hdfclife.com/retirement-and-pension-plans.
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"The thumb rule for retirement planning is - the earlier you start, the more you save. However, with age, your priorities change too. So, you need to factor in the cost of living in the present vis- a -vis future."
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