Suddenly, you do not have to get up early in the morning to go to work! You do not have to rush to meet deadlines, yes, you have hit retirement! Time to sit back and relax and reap off the fruits of your labor.
But then if you want to enjoy your retired years to the full extent, you need to be extra careful about your retirement planning. You have to remember that your regular salary will no longer be credited to your account.
Hence, you need to plan accordingly and sensibly too and that is why you need to invest in the best investment plan after retirement. Once you retire you should be able to enjoy the retirement years instead of always worrying whether there is enough money in your bank account.
Let’s go through some of the steps of retirement-planning which will help you to plan the right budget for your retirement plans.
1. Assess your Budget Correctly
Most of us who want to maintain our regular lifestyle would need a specific budget to maintain our retired life, as well. Just ask yourself the following questions, what kind of lifestyle would you live after retirement? If you would you like to maintain a similar lifestyle like the one before retirement then you have to assess your budget correctly. According to financial expert, approximately 80% of a person’s annual income is adequate to cover her/his retirement budget.
2. Plan for Medical Expenses
Old age brings a lot of medical problems and what’s more the treatment cost for these conditions is unreasonably high and can cause a severe dent in your pocket. Hence, it becomes imperative to buy a pension plan that gives priority to health insurance which, will help you take care of any sudden medical expenses that may turn up during old age. Your health insurance plan should include adequate features to cover you against chronic illnesses such as diabetes, cancer and Alzheimer’s.
3. Accommodate your investment to cater to different needs
We mostly invest in a single investment tool and not consider the option of gaining large returns by investing in different investment plans simultaneously. There are different kinds of pension plans which includes whole life plans, mutual funds, fixed income plans and an amalgamation of competitive along with traditional investment products that can provide you capital gain and hence you would be able to preserve enough funds in your bank account.
4. Give Priority to your Future Costs
Always keep in mind the perspective of market inflation before making retirement plans. At an annual rate of 7% inflation, the price of different items can rise up to unbelievable heights! You also have to keep in mind about the impact of taxes on your savings.
Take note of your responsibilities and liabilities that you should take note of after you retire. These may include helping spouses, aging parents, and dependent adult child (due to disability) and so on. If you are prepared in advance you will be able to plan your retirement budget more effectively.
5. Start Saving at the Right Time
Ideally, you should start saving for your retirement from your very first salary. However, most people do not implement this advice and start saving according to their convenience.
Therefore, you need to use your time smartly and start looking for a pension scheme such as Public Provident fund (PPF), that can help you secure a tension-free life for you during your retirement years.
Your Perfect Financial Planning after Retirement
Here is what you need to do post retirement, which can help you get rid of your financial problems.
- Senior Citizens Savings Scheme (SCSS): The SCSS scheme is one of the best retirement plans in India. All seniors who are above of 60 years can easily try out the scheme. The scheme has a lower limit of Rs. 1,000 and the upper range rises to Rs. 15, 00,000.
- Post Office Monthly Income Scheme (POMIS): The POMIS offers a monthly income and the MIS or monthly income scheme is offered by several post offices in the country and you can select the one which is right for you. The minimum investment ranges Rs. 1,000 and the maximum amount is Rs. 3, 00,000.
- Post Office Time Deposit (POTD): The POTD is similar to the term deposit offered by banks. The minimum amount is Rs. 200 and there is no specific maximum amount of deposition.
- Fixed Deposits (FD): Fixed deposits are offered by a whole lot of banks and companies, and you can opt for a number of fixed/bank deposits. The only problem on the bank deposits is that the interest rates are far lower when compared to the interest rates on company deposits and bank deposits.
- Monthly Income Plans (MIP): If you are looking for higher returns, then MIP is just right for you. These are specifically offered by mutual funds and are great market linked investment options. Mutual funds are tax-free but they are subjected to market risks.
The right financial planning can give you a secure future. So consider the above options and keep in mind about the tax factor and inflation and you will definitely get a nice return on your savings.
