Every retirement plan is unique as the financial conditions, ambitions, and the idea of dream retirement could significantly vary between two individuals. But no matter what stage of life you are currently at or what you’d like to do after retirement, there are a few common factors that deserve your attention.
Here is a retirement planning checklist with 5 factors essential for living an independent and rewarding post-retirement life-
- Monthly Expenses After Retirement
Your current standard of living should provide an idea about what your monthly expenses will be after retirement. If you are in your 20s or 30s, ensure that you also take inflation into consideration. Healthcare expenses will also rise as you age and deserve a dedicated spot in your retirement plan.
It is based on the approximate monthly expenses that you’d be able to calculate the corpus you’ll need before retiring.
- Post-Retirement Income Sources
Rather than fully relying on your savings, it’d be wise to work your way towards having income sources even for your post-retirement years. The income could come from starting a new business, freelancing, rent, or stable returns from investments like FDs.
You can also consider investing in a pension plan to save towards retirement throughout your working life dedicatedly. On retirement, the insurer will provide regular pensions throughout life.
- Life Expectancy
Another vital aspect of any retirement plan is life expectancy. You should at least have an approximate idea about how long you could live based on your current health status and family history.
Factors like retirement corpus and income longevity are significantly impacted by the number of years you’ll live after retirement. This will help you ensure that you don’t end up outliving your assets.
- Emergency Fund
Emergencies like illnesses, house repairs, deaths in the family, loss of income, etc., could easily derail any retirement plan. Thus, it is recommended that you should always have an emergency fund with at least 4-6 months of basic expenses.
If at all such emergencies consume a significant chunk of your savings, you can fall back on the emergency fund to manage your basic post-retirement expenses.
- Purchase Insurance
Insurance products such as life insurance and health insurance are an absolute must in retirement plans. A life insurance policy will provide financial stability to your loved ones in case of your unfortunate demise. Many of the insurance plans now also allow you to save and invest for your retirement.
Similarly, a health plan will ensure that you receive the best medical care without straining your finances.
Building Your Dream Retirement
After working hard for several years, you definitely deserve to live your dream life after retirement. But the onus of building the dream retirement is on you. Start planning your retirement as soon as you start earning, as the sooner you begin, the easier it will be to fulfil all your dreams and objectives.
Get in touch with a reputed insurer to know more about the various products they offer to add a valuable safety net that can help you and your family live a comfortable and rewarding life.