Have you wondered what your retirement period would look like? Today, the lifestyle of every retiree can be completely different from that of your parents. Early retirement is a new phenomenon that relates to the millennials today. As an aspiring retiree, you might wish to live an active life after your retirement. Hence, you might have your list of goals, such as traveling pursuing exciting hobbies, taking up photography, and so forth, on the top of your head. To reach your retirement goals comfortably, you might require years of planning and lots of resources. Therefore, let’s understand the top six tips mentioned below that can allow you to reach your retirement goals comfortably:
Consider your retirement age.
In India, the usual retirement age might be between 55-60 years. However, the retirement age has gradually decreased, which has eventually brought it down to 45-50 years. While many of you might still wish to retire at the usual age, the rest of you might aspire to retire early. As an aspiring retiree, you should consider your retirement age before you begin your planning process. After you figure out the age at which you want to retire, you can proceed further with your planning to build a secure future in the absence of professional income.
Identify your post-retirement goals.
Gone are the days when sitting back at home for relaxing would be a top priority after retiring. Today, 75% of the Indian population retire early to live a high-quality life to fulfill their goals after retirement. Ideally, you might aim to fulfill your goals after retirement since you might have had major financial responsibilities for your family at a young age. Hence, your goals, such as traveling, starting a new venture, pursuing interesting hobbies, and so on, can take a front seat after your retirement period.
Determine the retirement corpus
Retirement corpus can be the total amount of funds that can help you lead a comfortable lifestyle and meet your post-retirement goals. You should calculate the required corpus on a retirement calculator to get the estimated amount before you retire. When you get an estimated amount, you can understand if the amount can suffice your financial needs after retirement or not. If the estimated amount is not adequate for your retirement, you can accumulate more funds.
Start retirement planning at a young age.
The right time to start your retirement planning can be at a young age. When you are young, you might have an ample amount of time on your hands. Due to time in your favor at a young age, you can build a substantial corpus for yourself by the time you retire. Moreover, the power of compounding can allow you to earn interest on your returns when you are young—for instance, an early investment of Rs. 5,000 can allow you to generate a retirement corpus of Rs. 75 Lakhs.
Invest in a pension plan
After retirement, it can be obvious that you might not have a source of professional income. Although the flow of your income stops, you can still receive a retirement income with the help of a pension plan for your financial well-being. A pension plan can let you accumulate wealth during your active years and allow you to withdraw funds after retirement. There are numerous pension plans, such as annuity plans, unit-linked pension plans, National Pension Scheme (NPS) that can guarantee income after retirement.
Create a contingency fund
Due to high uncertainties, there can be a rise in unfortunate events such as critical illness, loss of income, physical disability, etc. Such situations can exhaust your retirement savings if you do not have any other financial backup to resolve it. To prevent your retirement savings from depleting, you should build a contingency fund that can look after such expenses for the next 3-6 months.
To sum up, retirement planning with adequate funds can bring you a step closer to your life goals. Hence, it can be crucial to start your retirement planning as early as possible, save adequately, and invest in the right retirement tools. Moreover, the top six tips mentioned above can let you achieve your retirement goals with ease.