What comes to your mind when you imagine your retirement years? Relaxation, zero stress, no working Mondays, globetrotting vacations, sleeping till noon. Retirement indeed marks the beginning of a golden phase in life. Retirement is the time when you can finally put your feet up and enjoy life without any burden of responsibilities. But the promise of enjoying the golden years to the fullest can quickly fade away if you have not planned your retirement financially.
Investing in the best retirement plans is crucial for every individual for stress-free living. There is no doubt that people who have planned their retirement and started saving for it from an young age are better prepared for their post-retirement years. As you know, the best retirement plans work around the power of compounding; it is essential to realize its importance. You can also take financial help from reputable advisors such as FinEdge who can guide you towards choosing the best retirement plans.
Now, let us look at the four golden rules for a comfortable retirement:
- Plan for More than You Need
At the point of retirement, or earlier, you must have a general idea of your financial needs post retirement. It is better to stay cautious and plan for more than you may need. Start with estimating the expenses. In retirement planning, it is essential to have a target in mind which you wish to achieve to live life comfortably in the golden years of your life.
To ascertain an approximate corpus, you might need to make some estimations and assumptions. First, you have to work out what age you wish to retire at, your life expectancy based on family history and health issues, expenditure every month and inflation that you expect on these expenses. However, it is wise to assume that you may need more.
- Begin Early
Most of us fail to realize the significance of early retirement planning, that leads to procrastination. It is the biggest enemy when it comes to making the best retirement plans. Starting early to invest money in the right instruments ensures that you have sufficient time on your side. It is the key to successful retirement planning.
You must understand that being young provides you with a benefit that is not available to all– ‘time’. As it is said, the early bird always gets a bigger pie.
Moreover, as you grow old, your risk-taking capability reduces. Starting late is also disadvantageous as it gives you lesser time to build your retirement corpus. There is even a possibility that you might fall short of your target.
- Follow Asset Allocation
Exposure to a variety of asset classes is imperative in building your retirement portfolio. The different asset classes such as equity, debt, gold have various features which help in maintaining the required balance in your retirement portfolio. By following a suitable asset allocation strategy based upon your risk appetite and the number of years left for goal realization, you can spend your retirement comfortably.
- Re-visualize and Re-Plan
Last but not least, it is essential to revisit your plans of retirement life once in every few years to see if your vision about your post-retirement plans has changed or not. Since we are continuously evolving as human beings, it is no surprise that our needs and our perception about life changes with time. So, if you find that your visualization of retired life has changed, then it is time that you re-plan your retirement and aligns your investment plans with your current vision of retirement.
Now that you are well versed with these golden rules of retirement planning start planning and saving for the life of your dreams with the best retirement plans in place.