How many times have you thought ‘Lets earn first, Retirement planning can be done later’? Most of us keep earning money waiting for the right time to make retirement plans, unaware of the fact that for safer and better life after retirement, there is no correct time to start planning retirement. The mantra that works is ‘Sooner The Better‘. It has been seen that generally after retirement, risk appetite of the investor is also very less and the investor prefers safer and non burdened options. Just fixed deposit is not the correct answer to all the problems. You may have to deal with many problems like inflation, changing interest rates, emergency requirements etc. So, you need to have answers to all the questions about retirement like where, how, how much to invest and more.
Let us see the answers to the questions that generally arise while planning about retirement:
- Priorities after retirement: Stable life standard is considered as the priority by most of us as you would not like to compromise just because you don’t have a job anymore. Proper medical facilities which becomes a major part of expenditure with age, travelling and other important things. The basic requirements are generally same for all, though something specific may change from person to person.
- Amount to be invested: The amount to be invested should be proportionate to your present expenses keeping in mind the interest that the designed portfolio will be able to generate and the problems like inflation etc. Regular investment now will help you to get the desired results later.
- Retirement Portfolio: A portfolio can be designed in various ways. But you must make sure that it is well diversified to get the best possible returns and as an investor you might not have to face a single prominent risk factor. Your portfolio must always include insurance which is many a times left out while designing a portfolio. For instance, it is very helpful after the death of single earning person in the family.
Your portfolio can be a combination of bank savings, mutual funds, provident fund, fixed deposits, stocks and government securities etc. Now here you can see that mutual funds are a bit risky but give good long term returns whereas fixed deposit are less risky and more stable but if the rate changes, your money will be stuck. Also stocks are risky, but investments in some good ones will prove to be beneficial. Overexposure in any one type of investment is never suggested and should not be opted.
There are a wide variety of options available like real estate, mutual funds, pension plans and fixed monthly returns plans, among others. And nowadays you can get some good pension plan insurance policies which can be opted for retirement planning.