Retirement Planning Tips for Late Starters
Below are a few tips to help you to select best retirement plan in India:
- Estimate your need: It’s important to find out how much you will need during retirement. Most people don’t have an idea about their financial needs and end up either over planning or under planning. Knowing what your target number is makes it easier to figure out how much you need to be saving in order to reach your goal.
- Understand your saving options: There are a lot of ways to fund your retirement. You can contribute in a PPF and Pf through your Company. This will ensure you have another source of saving. If you’re not eligible to participate in plan through your company, you can always chip in money to a traditional or Roth IRA. Traditional IRAs offer tax-deductible contributions while a Roth IRA gives you a tax break when it’s time to start making withdrawals.
- Cost cutting: The closer you are to retirement the more important it is to start getting your finances into order. Minimizing your expenses will free up additional cash that you can put away in savings and it can give you some breathing room if you’re expecting your income to drop once you retire. While you may not need to do something as drastic as sell your home, getting rid of high interest debt and looking for ways to save on your everyday bills can make a big difference in how long your retirement savings will last.
- Invest in SIP and ULIPs: Both SIP and ULIP were on the magic of compounding. Your savings grow twice as much instead of growing in a linear manner. When you are planning your retirement options late, it makes sense in investing in them instead of only a traditional saving account or an FD.
It’s better late than never to plan for your retirement. Even if you have started late, it’s quite possible to utilize that time and create a comfortable savings cushion for your retirement.
HDFC Life offers you various retirement plans to help you save for your future. For more information, visit www.hdfclife.com
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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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