What is retirement planning? Retirement planning means preparing today for your future life so that you continue to meet all your goals and dreams independently. This includes setting your retirement goals, estimating the amount of money you will need, and investing to grow your retirement savings.
With a structured plan, you are equipped to handle various factors such as surpluses, shortfalls, and emergencies. You understand how quickly or how likely you are to achieve your retirement goals. Additionally, you gain control over your cash flows, your earnings and expenses, and what level of risk you need to take to achieve all your goals.
In short, a retirement plan will let you develop a comprehensive understanding of your life goals (the ENDS) and also define the path (the MEANS) to achieve it. Why do you need to plan your finances for retirement? It is easy to cover your expenses as long as you are earning your monthly salary.
But post retirement, you need to have enough money set aside to live the rest of your life and maintain a good lifestyle.
Important Points Retirement Planning
1) Financial Independence
“Financial independence isn’t defined by how much money one makes, but more so the freedom they have to live their lives without limitations and financial burdens,” says Constance Carter, a real-estate firm owner and personal finance expert. And there is no age or destination in life at which you achieve it.
2) Leaving Savings for the Family and Children.
Another impressive reason to consider early retirement planning is that many policies and plans include life insurance. This means that your spouse, children and other beneficiaries will be provided for in the untimely event of your demise.
3) Maintaining Your Lifestyle
Exercise Regularly and Be Physically Active At this time, at-home workouts may be a good idea. But you can also walk your dog or run outside. Be sure you know what’s going on in your area and if there are any restrictions or mandatory self-quarantines.
4) Increasing Medical Expenses in Old Age
The cost of full body checkup for senior citizens starts from Rs. 1000 to Rs. 25000 or beyond as we add condition specific tests whats worse the charges become more pressing as we switch from neighborhood clinic to premium health centers.
5) Increasing Average Life Expectancy
There are no surefire ways to increase life expectancy, but research has shown that people who embrace certain lifestyle changes tend to live longer than those who don’t. These include things like adjusting your diet, turning off the TV and getting outdoors, increasing social interactions, and having sex.
Conclusion
Planning for retirement is one of the most important parts of our financial planning. You can’t run from the reality that sooner or later your professional life will come to an end and you will be relying on the savings and investments you have made.