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Ways to plan a stress-free early retirement

January 23, 2021


Life involves hard work mainly so one can not only fulfill their goals but also secure their family's future. The latter goal involves creating enough wealth that can afford one a comfortable and stress-free retirement. However, comfortably retiring does not require that one keep pushing themselves till exhaustion until they turn 60 years of age. With the right financial planning, early retirement is possible. Here are some ideas to help you plan a stress-free early retirement.

1. Start as early as possible

Starting early gives you an upper edge when it comes to building a savings corpus. The longer you wait to begin saving for retirement or investing in tools that will build your wealth for a comfy retirement, the less likely you are to leverage the power of compounding. Compounding is essentially a factor of time more than anything else, and the more you wait, the less time you allow compounding to work its magic on your investments. Another reason starting early is beneficial is that later in life you may encounter financial emergencies that require dipping into your retirement corpus. However, early on the chances of experiencing these emergencies is rare. You can amass a huge and untouched corpus the earlier you start. 

2. Prepare for potential contingencies

Contingencies are unexpected demands that require your immediate attention. Your retirement planning should account for contingencies that may afflict you later in life, be it in the form of a genetically passed down critical illness or an economic crisis. Your retirement corpus needs to be enough to support a comfortable lifestyle while also covering the costs of these contingencies. The ideal way to a stress-free retirement is to prepare for these contingencies like they are bound to happen. Naively hoping for the best can be costly, but over-preparing never hurt anybody. 

3. Aim to beat inflation

Retirement cannot be stress-free without planning to cover inflation costs. The rising cost of living is one of the factors behind why a savings corpus will simply not cut it for your retirement, especially if you wish to retire early. You need wealth creation tools that are either as long term investments or short term high-risk market returns. Your financial planning for early retirement is incomplete without a wealth creation element to it solely because building wealth will account for potential inflation costs. This is why financial advisors suggest going beyond a simple pension plan and also diversifying one's portfolio with financial instruments like equity mutual funds, ETFs, and the like. 

4. Keep debt to a minimum

Paying off debt in time is part of the essential financial hygiene everybody should be practicing, irrespective of whether they are retirement planning or not. However, debt can dent your savings and prevent you from growing your wealth at the pace it needs to for a comfortable retirement. When you are in any kind of debt, ensure you pay it off as soon as possible. A heavy interest is applied to outstanding dues that haven't been paid in a long time. Retirement is a time in your life when you need not be fretting about these debt payments. Hence, it is vital to ensure you pay off debts before they grow to monstrously costly amounts.

5. Get to know your investment option

Learning more about your investment options is key in financial planning. From classic pension plans to unit-linked insurance plans with a focus on retirement planning, you have a plethora of options on the market that can serve as your future retirement income. One such plan is the HDFC Life Pension Guaranteed Plan. This plan is a straightforward way to give you the annuity you wish to receive as yearly, half-yearly, quarterly, or monthly pay-outs. You simply have to pick the purchase price you prefer to pay as premiums or choose the amount of annuity you want to receive as pay-outs and the HDFC Life Pension Guaranteed Plan will offer them to you as retirement income at the frequency you desire.

The Bottom Line:

If you wish to retire early, the key is to start now and follow the steps mentioned above. This is a sure-fire way to reduce your stress and ai in retiring earlier than the average age. This is where the HDFC Life Pension Guaranteed Plan comes in. This is a single premium pension plan which offers guaranteed income*at regular pay-outs for life. You can start paying your premiums towards this plan and begin or receive your annuity immediately. Alternatively, you can defer by a few years until you wish to receive a retirement income. Hence, stress-free retirement savings are assured with the HDFC Life Pension Guaranteed Plan.

* The word "Guaranteed" and "Guarantee" mean that annuity payout is fixed at the inception of the policy



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.