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Retirement Planning Mistakes You Should Definitely Avoid – HDFC Life

August 17, 2018
So you’ve just entered the working world. But, you’re a responsible individual, so you know you have to start saving for your retirement right away. But how do you do this? Do you listen to those around you and simply put away 10% of your salary? Or do you put your savings into investments and let them do the job for you? Honestly, when it comes to planning for your golden years, it’s a good idea to work with a combination of savings and investments. While every individual may have their own formula for their retirement, let’s take a look at a few mistakes that everybody should avoid:

1. Underestimating the amount of money you will need

Quite often, people tend to underestimate how much money they require per month. While you’re earning, it may not seem like such a big deal to dip into your savings every now and again. But once you’re retired and you no longer have a steady source of income, it’s incredibly important to stick to your budget. With this in mind, you’ll need to take stock of your current lifestyle, understand the inflation trends, and then calculate how much money you will need to sustain your current standard of living once you are retired.

2. Ignoring medical expenses

As we all grow older, we’re going to have to deal with various health issues. While you’re saving for your retirement, you must not forget to factor in medical expenses. However, budgeting for these kind of unexpected expenses can be very difficult. This is why it’s a good idea to get yourself a good health insurance plan. With your insurance in place, you can get the kind of treatment you need without having to worry about the growing medical bills that you may have to pay if you need medical attention.

3. Forgetting about taxes

Depending on the kind of retirement plan you choose to invest in, you should always be mindful of the kind of taxes you will have to pay on the returns you earn. You should always try and look for those investment avenues that allow you to enjoy tax rebates, so that you don’t spend more money than necessary and get the most return on your investment.

4. Dipping into the funds before your retirement

No matter how early you start saving for your retirement, it’s important to remember that the more you have saved up, the better it is for you. This is why you shouldn’t think about dipping into these savings before you actually retire. It’s often seen that people pull money out from their retirement fund to help pay for their children’s education, but this isn’t ideal. Instead, you can think of purchasing a child’s plan for your little ones, so that once they grow up, they have their own funds to use.

5. Thinking it’s too early

You should always remember that it’s never too early to start saving for your retirement. Ideally, you need to start building up a retirement fund right from the time you start working. The earlier you jump on the retirement planning bandwagon, the more time you have to build yourself a significant nest egg for your retirement.

So, whether you’re just entering the corporate world, or you’ve been working for a few years, now is the perfect time to start planning your pension. To find out more about how you can truly enjoy life after retirement, click here.

 

 

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Retirement Planning Mistakes You Should Definitely Avoid

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