A successful retirement planning ensures that you will have a financially independent post-retirement life. But, in order to make your retirement planning successful, you have to be methodical in your approach.
There are some steps by which you can ensure the success of your retirement planning. Here’s a step-by- step guide to help you with your financial planning for retirement. Step One: Plan Your Post-retirement Lifestyle While some people prefer a relaxed lifestyle post retirement, some want a life full of activities and adventures. You may have postponed many of your dreams and aspirations to accomplish in your “someday”. Your retirement opens the door to the “someday”. So, if you want to fulfil all your dreams and lead a luxurious life after retirement, you must make your plans in such a way that suits your needs. If international tours, for instance, are among your post-retirement escapades, you would need a larger retirement corpus than that if you had preferred a laid-back kind of life. So plan your post-retirement lifestyle based on which you will set your long-term financial goals. Step Two: Strategize your retirement Planning with the Help of a Pension calculate Pension Calculator is online tool to help you understand roadmap you need to follow to reach your financial goal for retirement. A pension calculator asks for a few pieces of information like your age, retirement age, monthly savings and annual income. It may ask some lifestyle related questions like your post-retire accommodation etc. Based on the information provided by you, the pension calculator will give the estimated amount you need to have in your retirement corpus and the amount you need to invest every month in order to achieve your financial goal. Step Three: Savings and Investment Should go Hand in Hand If your employer has already opened an EPF account for you that means your retirement planning is in progress. Never dig into the account till your retirement. Let the power of compounding work wonders on your retirement savings. Simultaneously start putting your money into a good investment instrument as well. There are different tax-saving investment instruments available these days. Choose one that suits your financial needs. As an advice, you can consider investing in a ULIP product. ULIPs are investment plans that are seen to offer 9.8% return in the past three years. If your risk tolerance is higher, you can invest in other investment instruments as well, for a higher ROI. So, both savings and investments are required to build a sizeable corpus for your retirement. Step Four: Invest in Insurance Plans for an All Round Financial Security Insurance Plans should be considered an important part in your financial planning. Different types of insurance are required to have a financially secure life. Health insurance plans, for example, will take care of the medical emergencies while retirement plans will maintain a steady flow of income after retirement. While investment plans like ULIPs will help you create wealth for future, term insurance plans will secure your family financially in case of your unexpected early demise. So, retirement plans, health insurance plans and term plans are three key ingredients of a successful retirement planning. Here is one piece of advice for you, if you are averse to buying a term plan because it only offers the death benefit, you should buy a TROP (term with return of premium) plan, as it will return you the total premium amount in case you outlive the policy term. The steps mentioned above are the very basics of a successful financial planning. Saving and investing, the two integral parts of retirement plans, should be done strategically, systematically and persistently. The more methodical your approach, the better chances of success will you have in terms of achieving your retirement goals.
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Archana SinghFinance and Investment Blogger Archives
March 2017
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