Key points for the Retirement Planning

Needful Income After Retirement 

Most people have no idea approximately how much income they would need to be financially independent after retirement. financial crisis later in life. Everyone has different needs and following general rules can be misleading. Retirees tend to spend on different things, taking into account their lifestyle and incomeThis can translate into annual or monthly savings figures. 

Planning for Health 

In today's fast-paced life, maintaining good health is often a tedious task. With numerous age-related complaints and diseases, the treatment costs burn a hole in your pocket. , which forces you to break your savings early or seek financial help. To avoid such circumstances, it is recommended to get medical insurance that covers unsolicited medical expenses and hospitalization.

Diversification

Whether it's employee stock options or pure trust in a company, most people tend to carry large amounts of select company stock. They choose not to diversify because they think they know these companies well. risky behavior and may restrict other investment opportunities. A balanced portfolio of equity and debt can help your investments generate potential returns.

Liquidity

Retirement planning is effective when saving begins at a young age. It is a long-term goal and throughout life different situations increase the chances of using the money saved. It is imperative that such investments have a lock-up period or penalty for redemption before the expiration date. This acts as a deterrent and helps curb the propensity for regular investment disruption.

Review 

The world is undergoing socio-economic change; Now more than ever. Sticking to a long-term financial plan without thinking about it can lead to erratic performance. A change of job, city, the birth of a child, changing markets and many similar factors require a change in saving behavior. The AnalyzeAssessAdapt approach, in which the retirement plan is reviewed every few years, helps account for market and lifestyle changes and makes the plan more dynamic.

Liability 

Long-term debts such as home loan, real estate loan, car loan and monthly EMI payments for various short and long term investment goals related to children's education, marriage, buying a second home, etc., take up a significant portion of your monthly income . Now imagine that such debt persists even after you retire. Such payments will seriously affect your financial health after retirement.To avoid such scenarios, make sure you take care of all your debts before retirement age.

Inflation

Inflation is a demon that hits hard on anyone who ignores it. Because retirement is a long-term goal, it's important to understand the impact of inflation on your financial goals. Inflation is the rate at which prices are increasing. Significantly reduces electricity purchases.If you ignore inflation, you'll save far less than you'll need for years to come. If you are spending Rs 50,000 every month at 30, at 60 you will need Rs 3.81 lakhs per month  assuming  prices go up 7% every year. You must invest in  a way that will outperform inflation, ie generate returns that are at least a few percentage points above the rate of inflation.