Why retirement plan should be on your priority list
- DetailsWritten by PolicyBazaar -
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Updated date : 08 November 2019
Every person wants to live an independent life even after the retirement. If you too have this wish then retirement planning should be on your priority list. We are actually so busy in our daily lives that we forget to make plans for our retirement. A person should start planning for the retirement as early as possible. You should start planning for your retirement as soon as you earning. It is important that you keep your retirement planning on the priority list so that your dependent family does not suffer after your retirement.
Why is it important to plan for retirement?
It is important that a person does start retirement planning. When you start your savings early then you are able to accumulate sufficient funds for your retirement. Let’s understand this with the help of an example:
A person named A started saving when he was 30 years old and he used to save Rs. 7,500 every month. After 30 years when he will turn out to be 60 years old, he would have already accumulated Rs. 75 lakh (assumed a compounded annual growth of 8 percent). There is another person named B who started saving late at the age of 40 years then he was able to accumulate Rs. 30 lakh only for the retirement. Just because B was 10 years late he was not able to build a corpus like A.
That is why it is important that you do retirement planning in your early days. The very first rule is that you should start saving as early as possible in order to accumulate sufficient funds. Some people who spend extravagantly find this rule hard. But for most of the people, it is one of the easiest rules. Life is very uncertain as you do not know what is going to happen next. If your family is dependent on you then your retirement and your illness can affect the financial stability in the family. So, you should do proper retirement planning once you start earning.
Check out some of the points that will make you believe that retirement planning is important:
- You may face many financial obstacles in your future than your present or past: You cannot predict what is going to happen next; you can just hope for the best. You cannot also ignore the uncertainties that may arise in the future. You may experience financial hardships in the future which makes a point to start with retirement planning at the earliest. Many people do not plan for their retirement then they realize it later when it is too late.
- Retirement is the ideal time to check off the bucket list: People are not able to fulfill their many dreams due to the shortage of time and responsibilities. People have a long list of places to explore and things to do and experience. Retirement is the best time to check off the bucket list. After retirement, you have a lot of time and you can freely explore many places and try new things as you do not have any tension of workplace. This is the best time as you can accomplish your goals with your retirement funds.
- Your family is dependent on you: If your family is dependent on you then your retirement can affect them. On the other hand, if you will have sufficient retirement fund then you will be able to fulfill all the wishes of your family. Your family will be able to live a happy and good life.
- You want to be independent even after your retirement: Every person wants to be independent even after the retirement so that they can live their life happily with the freedom. Retirement planning would help you to be not a burden on your family to whom you love the most. If you will have sufficient funds for your retirement then you will become a responsibility on your child. No one wants to do that. With the sufficient funds than you can also help your family when they face a tough time.
- To contribute to your family: If you want to gift something big to your family then your retirement funds can help you to do that. You may want to go on a vacation with your family after the retirement. You can easily fulfill this wish of yours with your funds. Your family would love this gift of yours as nothing could be better than this. You may also give a wonderful gift to your children or grandchildren. This token of love would ensure your children that you will be there for them no matter what.
- The average life expectancy is increasing: You should do retirement planning as the average life expectancy is increasing than before. There was a time when the average life expectancy was low but the things have changed now. The average life expectancy is around 80 years nowadays. In order to live a longer life, people need more retirement funds. That is why it is important that you start retirement planning as early as possible. You will have more retirement funds if you would start saving early. That is why you should plan early so that you can have more retirement funds with you.
- You cannot work always: As you grow, it becomes hard for you to do some task as your stamina decreases. Many people say that they do not want to save for their retirement as they will work forever but it is no excuse for not doing retirement planning. If you will not have retirement funds then you may get stuck in your work forever plan. Retirement is the best time to enjoy the life as you get free from a lot burden and responsibilities. In the absence of retirement funds, you may not be able to live a good and healthy life.
What are the various tips that you should keep in mind at the time of retirement planning?
Check out some of the things that you should remember if you are planning for the retirement:
- It is important that you make an estimate of your retirement budget. Your estimate should include all the big and small expenses. You should not ignore the impact of inflation on the retirement budget.
- Health is wealth. Nothing is more important than your health. Healthcare holds a great portion of your retirement plan. As the person ages, health problem increases. You should also make an estimate of the healthcare cost after considering the impact of inflation.
- It is important to make a retirement plan. Your retirement plan should include your expenses and budget. It should also include the time of the retirement. The next step is to make an estimate of the expected income after retirement. The difference between your estimated budget and expected income after retirement will tell you that how much retirement funds are still required.
- You must pay off all your debts before your retirement. When you retire, you have limited sources of income. With these limited sources, it is tough to pay off all the debts. That is why you must pay off all your debts before your retirement.
- You should keep a track of your savings.
- It is important that you keep your investments right. Long-term investments help to create wealth in the future.
It is important that you do retirement planning as early as possible. Many people do not understand the value of savings for the retirement. They realize it later when it is too late. When you start saving early, you have sufficient funds at the time of the retirement. Retirement is the best time to enjoy the life to the fullest. People do not have a lot of responsibilities and workload after retirement. Every person wants to live an independent life even after the retirement. Retirement planning helps you to live an independent life even after the retirement.
Life is quite unpredictable; you cannot tell what is going to happen next. Life can get more tough in the future in comparison to the past and present. Retirement planning is very important as financial hardships may occur in the future. If you will have sufficient funds then you will be easily able to deal with all the hardships that will come your way. On the other hand, if you will have sufficient funds then you will have to take loans to deal with all the problems which will only increase your debt.
Many people believe that they do not need to save for the retirement as they can work forever. In the future when they do not have sufficient funds to fulfill their dreams then they get stuck in work forever plan. When a person has sufficient funds then he or she is able to help the family in case of an emergency. Retirement planning plays a very important role for those who have a dependent family. Their family can suffer in the absence of sufficient retirement funds. That is why it is important that you keep your retirement planning on your priority list so that your dependent family does not suffer after your retirement.
Sometimes you want to make your children and grandchildren feel special by giving them something special. Retirement funds help you to buy gifts for your family. The average life expectancy has increased than before. In order to live more, people need more retirement funds. In order to have more retirement funds, you will have to start your savings at the earliest. If you will start your savings late then you will have inadequate funds that would not be sufficient to meet your retirement needs. You can any time support your family or relatives in the hour of need when you have sufficient retirement funds.
Retirement is the best time in one’s life as the person does not have any workload. This time should be enjoyed to the fullest. Life becomes very hard when a person has to work even in the retirement age in order to fulfill all the requirements. This is the time when a person should fulfill all his or her wishes such as exploring new places and experiencing and trying things. In short, retirement is the best time to check off the bucket list. That is why retirement planning plays a very important role.
Retirement is a new phase of life for you and your family. It should be enjoyed to the fullest without any worry. You should prepare a retirement plan in which you should mention your expected expenses and budget. The time when you are expecting or planning to get retired should also be mentioned. You should consider the impact of inflation on your budget in the future. It is important that you pay off all your debts before the retirement. When you get retired, you have limited income sources and at that time it becomes tough to pay off all the debts.
If you are looking for the answers to various questions including:
- Why retirement planning should be on your priority list?
- Why is it important to plan for the retirement?
- What are the various tips that you should keep in mind at the time of retirement planning?
Then you are the right place, please refer to the above-mentioned information.
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