In most cases, this is because people do not give due importance to some of the most valuable rules of retirement planning. If you are planning your retirement and want the post-retirement years to be some of the best years of your life, these are three golden rules that you should keep in mind-
Start EarlyMost retirement plans, be it unit linked pension plan, NPS, or regular income mutual funds, require a considerable amount of time to deliver high returns. This means that rather than thinking about retirement when you are already in your 40s or 50s, it is crucial to start planning as early in life as possible.When you invest in your 20s or 30s, your investments get adequate time to grow and turn into something that can help you live a financially independent life after retirement.
Consider InflationInflation is that silent killer that can easily damage your finances if you are not smart enough. For instance, as per the current inflation rate in India, if your monthly expenses are Rs. 1 lakh now, you’d need something close to Rs. 3 lakhs to manage the same expenses 15-20 years from now.So, if you are planning to invest for your retirement, one of the most critical retirement planning rules is to consider inflation and calculate your future expenses accordingly.
Purchase Health InsuranceNothing drains your savings as a medical emergency does. A simple way to protect yourself against high healthcare costs is to purchase health insurance. In fact, if you are the sole breadwinner, go ahead and buy a family floater plan to cover all the members of your family.This will ensure that if at all any of your family members need medical care, the insurance provider will be responsible for paying the expenses and your savings and investments remain intact.
Planning your retirement can be a complicated and time-consuming process. However, now that you are aware of what are the rules for retirement planning, you are now ready to lay a strong foundation for your post-retirement life. Learn as you grow and consult professionals when required to build a rewarding and robust retirement plan.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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