Best Retirement Planning Tips in India

Getting a job is one of the most crucial stages of your life. You work hard for your whole life to make the future of your every family member safe and secure, but after retirement, you get the time to work upon your long pending desires like learning music, painting, touring foreign countries, getting settled into a new location, etc. Retirement gives you the chance to do things that you have always wanted to do. That’s why retirement is considered as the end of work and a new beginning of life.

But after working for your whole life, one of the most important things which you need to have at this stage is a peaceful retirement. Everybody wants to retire in peace and that can only be done if you have made a well analyzed and proper planning. You know that retirement is coming, but it doesn’t show up one day and takes you by surprise, so you need to get prepared for it. But how to plan retirement for your post retirement life?

The article outlined some of the best retirement planning tips in India, which will allow you to retire in peace and enjoy the rest of your life in the best possible way.

Start Early

Planning for retirement is what most of the young people avoid. They think that retirement planning is linked with advanced age and that’s why they don’t need to think about retirement in their 20’s. But that’s a wrong perception because being an early bird for retirement planning allows you to maximize the corpus by a great extent. Planning for retirement in your 20’s allows you to save enough money for your retirement. It also gives you enough time to make changes to your plans according to the changing life situations which results into an effective and proper planning.

Go for a Term Insurance

Buying a life insurance policy allows you to secure the financial future of your family in case of your absence. You will never wish your family to face a financially uncertain future due to your untimely death. That’s why buying a term insurance policy is considered as an ideal decision to secure the future of your family because a term insurance gives you a very high cover amount of cover at a very low premium amount. You also get the opportunity to choose the policy term, according to your need and situation.

The only thing which you need to do is to compare different term insurance plans and then choose the best one for you at an early age like 25 or 30. But be very accurate while choosing the sum assured which will be given in the form of death benefit to your loved ones. An ideal sum assured is 10 times the annual income of the buyer.

Buy the Right Health Cover

Buying a health insurance policy is one of the most important parts of retirement planning and buying health cover at an early stage of life is considered as an ideal decision. This is because; buying a health insurance at an early stage of your life is an economical decision. The premium of health insurance policy keeps increasing with your age and deteriorating health condition and buying at a young age when you are healthy, allows you to lower down your premium amount.

It also allows you to complete the waiting period when you are young, so that it doesn’t become a hassle for you at an advanced age of your life. With the growing age, your health condition start deteriorating and you require frequent medical attention which could bury deep hole in your pocket after retirement. That’s why a health insurance policy is necessary to cover your medical needs after retirement.

Be Ready to Tackle Inflation

Always consider inflation, while planning for your retirement. The value of Rs.10 now will not be the same in the future and that’s why while planning for the future, you need to consider the rate of inflation and how far it can go in the near future. For example, at the age of 28 years, you made your retirement plans without considering inflation rate (5%) and after analysis, you come at a figure of Rs.2 crore, which you thought will be enough for retirement. But during the 20 years, due to high rate of inflation, which continued at 5%, the price of everything reached to a skyrocketing limit. Now in this case, your Rs.2 crore will not be sufficient for the rest of your life because you calculated the amount without considering the rate of inflation. If you would have considered the rate of inflation, the ideal amount would have been 7,95,98,931 crore rupees (calculated at 5% of inflation rate for 20 years).

Get Rid of Your Debts

Retirement is that stage of life where you relax and enjoy the missing part of your life and that’s why it shouldn’t be ruined with pending rents, debts, loans other financial burdens. You will never be able to enjoy your retirement with such financial burdens and that’s why you should plan your debts and loans in such a way that it will not get carried on to your retirement.

Proper Investment Planning

After retirement, your income becomes limited and that’s why it’s necessary to plan your investment in such a way that it provides regular income to you after retirement. You get various investment options to choose from but the most important thing you need to do before investing is analyze your need and situation and then choose your investment tool accordingly.

So, by reading these insightful tips, you must have got the answer to the question “how to plan retirement” . Follw these tips and make the post retirement phase of your life as one of the most enjoyable and peaceful phases with the help of proper planning. Being an early bird for retirement planning allows you to grow your corpus and gives you enough time to make changes to the plan according to your life. Use the above mentioned tips and enjoy your retirement with peace.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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