Things to Keep in Mind When Planning Your Retirement

Retirement has traditionally been viewed as a milestone, a time in your life when you are rewarded with a new horizon free of all responsibilities. You are free to spend your time leisurely engaging in hobbies that make you happy. Is it possible, however, without financial backing? This is why retirement planning is essential. It enables you to save money systematically over a period of time to build a corpus large enough to cover all of your future financial needs.

Although most Indians consider retirement plans necessary, only a small percentage save for their golden years. According to a recent HSBC survey, nearly 76% of the working population expects to live a comfortable retirement life, but only 33% is allocating resources for it. A retirement planning or pension plan calculator can be a huge help in making the right investment decision. If you are unsure of how to prepare for retirement, read on.

What Factors to Consider for Retirement Planning?

The important factors to keep in mind before selecting a pension plan in India are:

Determine Your Retirement Budget

You are aware of your monthly expenses. Include your life goals, as well as your monthly expenses, such as home renovation, children's marriage, and so on. Also, keep in mind the effect of inflation on your corpus when calculating. After you've added up all of your expenses, you'll have a good idea of how much money you'll need post-retirement to maintain your current lifestyle.

Start Early

It is advisable to begin saving once you have determined your retirement corpus amount. You should ideally begin saving as soon as you receive your first pay. Even if the amount is small, regular savings help you achieve a goal in the long run due to the power of compounding. A retirement planning calculator can assist you in determining the corpus amount and the time required to obtain it based on premiums and your age.

Risk Appetite

There are different financial products available that can help you in creating wealth over time. These include:

Equity Funds	For those who are comfortable taking risks. These funds provide higher returns, but they are subject to market volatility.
Debt Funds	They provide guaranteed returns and are ideal for seniors approaching retirement age. They are low risk, but the returns are relatively low.

Get Health Insurance

As people get older, they tend to develop a variety of ailments. Critical illness treatment costs are skyrocketing and can quickly deplete all of your savings, including your pension policy fund. It is strongly advised that you obtain a health insurance policy that meets your needs.

Re-evaluate Periodically

It is necessary to reassess your plans every 2-3 years to ensure that they are progressing as per your goals. If you are unsure, realign your investments accordingly.

Invest for the Long Term

The best retirement plans in India offer reasonable returns to policyholders over a long-term period. However, no financial product is risk-free. So, make sure you read through the terms and conditions and policy details carefully first. Also, give your investment enough time to grow and benefit from factors such as compounding.

Creating wealth is a long-term endeavour. It is best to give your retirement policy as much time as possible for wealth creation. Always remember that the key to accumulating a sizable retirement fund is perseverance and consistent investing.