The mere reference to the word ‘retirement’ brings a certain relief to those spending so much time daily in their 8-hour shifts. Retirement could mean relaxing aware of a newspaper in hand over a weekday morning, while for some, it signifies the afternoon nap. For others, retirement can be going on a road trip with relatives and buddies, soaking up the sun and peace around. Yes, those golden years are most-awaited by hard-working professionals as if you who spend 8-10 hours every trip to work.
In a sentence, retirement can be an end to the daily struggle for the salaried persons. If you take a pension plan, you’ll be financially independent and free in this beautiful phase of life even when there is no incoming salary. Thus, every individual who dreams of enjoying financial independence and a blissful retired life will agree why retirement planning is vital. More importantly for individuals in private jobs, a proper retirement plan would help you determine retirement income goals, and then design an achievable path to benefit from the benefits. Continue reading to learn more.
What’s Retirement Planning and What Does a retirement planning near me Do?
Retirement planning is an activity of setting retirement income goals and following them with the actions essential to achieve those same goals.
An easy rule of thumb says that you’ll need to replenish 70% to 90% of your pre-retirement income to lead a good retired life. This implies if you’re making ₹ 70,000 per month (before taxes), you may want ₹ 49,000 to ₹ 63,000 a month in retirement income to take pleasure from the same quality lifestyle you had before retirement. For instance, somebody plans to retire within the next 15 years. The retirement planning would have to include creating something to generate ₹ 49,000-63,000 monthly income from the year 2034 when they retire.
If you’re targeting 70% of your pre-retirement income for post-retirement usage, then you will need to not only save, but also invest properly. This might mean buying high-return assets so that your savings grow quicker.
Why do you will need retirement planning?
1 day you are celebrating your first salary and in a few decades,a they are cutting a cake ton your retirement farewell. Yes, life moves that fast.
Before you understand, you will be facing daily living expenses, grappling with medical costs, and fighting inflation. There are always emergencies in old-age. So, having an adequate corpus to cope with each one of these is essential. Retirement can be an important reality for everybody. Nonetheless it is easy to give up an eye on a long-term goal. That is why you will need retirement planning.
Here are the top four reasons why you’ll need retirement planning.
Medical emergencies – With rising age, come new and health issues. Medical expenses make a massive dent in your finances post-retirement. Studies show medical inflation is 14-15% annually. This means health costs potentially become 4 times what these were just ten years ago. Take a proper retirement plan, rather than lose sleep over long and multiple hospitalisations. With a big enough retirement kitty or pension, post-retirement you will be well-taken care of.
Inflation – Price rise is a universal fact. The result of inflation, even if it seems small in the short-term, can be massive over a couple of years.
A 5% inflation means ₹ 100 will have the value of ₹ 95 a year later. But, a 5% decline is quite severe. Twenty years later a sum of ₹ 21 lakhs will have the same purchasing power as ₹ 7.5 lakhs today if inflation grows by 5% each year. In growing economies like India, the buyer level inflation can become more than 5%.
Even when you are retired, some costs will always remain. You might not exactly have Equated Monthly Installments (EMIs), or you might not eat out much, but you’ll still need to buy groceries, medicines, and pay back utility bills. An excellent pension plan must be bought so that anticipated inflation is accounted for.
The nice part is that your pension strategy gives you the flexibility to buy a retirement plan and stay in control. Government-funded pensions are a set amount that can remain unchanged for a long time. There are a few small benefits for senior citizens, but there is absolutely no outright income replacement solution from the government. So, participating in retirement planning is a good move to make. Knowing the goals, choose pension plan and get a self-sponsored retirement income!
Nuclear families – Over are those days when older people could rely on monetary support from a huge family. The culture of the Indian families is changing as couples are going nuclear and staying separately. There is also fewer children. Twenty-thirty years down the road there might not exactly be many relatives to manage you as a senior citizen. Children, when they grow up, want to relocate for jobs elsewhere. Plus, the pressure to make money and have a decent lifestyle would not give them plenty of time to allocate for parents and elders.
Hence, it is vital to plan your retirement without expecting any financial help from your immediate family. There is a lot of mental satisfaction in to be able to buy your spectacles, medicines, provide food yourself and also your partner. Why should it change if you are 60? A retirement plan gives you always to keep your mind high and live a retired life filled with dignity and respect.