Did you know that the way you plan for retirement affects your future's plans? It’s always advisable to start saving at an early age, especially if you want to get the best benefits from your retirement plan.
It is a common fact that the majority of the population do not save for retirement at all. This is a worrying trend that needs to somehow change eventually.
The moment you begin approaching 30 years is when you really begin seeing life in all its aspects. You see the reality of retirement fast approaching and you do not know what to do at this point. You can approach financial advisor for planning. But to plan a perfect retirement life plan then you should consider following things:
Look at your goals
There is a notion that when you are growing your family and career then everything stops at that point. Remember that this is added responsibility that needs to be sorted out so make sure that you have a budget and a financial plan. Your savings for retirement should also be the thing that you need to consider in your financial planning.
There are things that you can surely put off now even as you seek to boost your savings. The most important thing in your mind should be your retirement goals.
There can be many things which you want to do in your retirement life like:
- Your child's destination wedding
- Travel plan with family
- Owning a beach house
- Owning a green organic farm, etc
All above mentioned things are possible if you plan your retirement early. Compound interest on our early investments add up to significant multiples. You can start right from the age when you start earning. Younger the person is at the time of allocating funds towards a retirement investment, higher is the resulting payout at the time of investment-maturity.
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Your retirement age may be getting closer but it is good to note that you still have enough time on your side to save and invest. What you can do is to maximize on your employer savings plan(ESP). An employee savings plan (ESP) is a pooled investment account provided by an employer that allows employees to set aside a portion of their pre-tax wages for retirement savings or other long-term goals such as paying for college tuition or purchasing a home. This will give you the power of compounding that by saving a little you beat the odds of saving much later.
Apart from EPS, below are the most common ways in which you can maintain your present standard of living after retirement.
- Invest in mutual funds
- Post office monthly income scheme (POMIS)
- Fixed Deposits
- Public provident fund (PPF)
- Pension Funds
- Senior Citizens Saving Scheme
- You can buy physical property and put them on lease
- Invest in Equity
It’s better to invest in equity instruments to counteract inflation and accelerate the growth of your money. Investing in low risk investment will safe guard your money but will not grow your money.
One factor which can affect your retirement plan is inflation. Inflation can make your returns take a plunge and therefore, while choosing any plan, you must make sure that you have taken the futuristic price-rise projections into your consideration.
You can boost your contributions
It is a fact that most people have their income peaks during the ages of 34-56. These are the best years that you can have your retirement savings increased. This is very easy to achieve as you can make sure that you are contributing a percentage of your income rather than the whole amount.
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Create contingency fund
There can be unplanned expenses also which can affect your financial planning so you need to plan for such events also. Like, medical emergencies or business failure or unforeseen circumstances. These unexpected and unavoidable problems can affect your savings. So always plan to create contingency fund. Invest in health-insurance and specific plans simultaneously for such emergency situation.
If you do that, then you are guaranteed of getting a boost of your retirement savings. That is why you need the right plan that will help you achieve the goals that you have for your family.
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