The importance of this point simply cannot be stressed enough. The earlier you start your retirement planning the easier it gets to create a corpus that you feel is enough. If you are not sure what amount would suffice, there are lots of online calculators which can help you decide the amount needed for your retirement. Most of us have retirement plans at the bottom of our priority lists, which is the reason we try to catch up later on in our lives or career. Most of us worry too much about the next bigger car or better bike or better vacation, rather than devoting some time to life post retirement. Starting early gives your funds enough time to create a surplus for your retirement. If you still haven't started, go ahead and start saving immediately based on your retirement planning.
A life Insurance Annuity Plan can help you secure your retirement life.
Inflation acts as a perfect enemy to your investment plans, as it keeps eating into your returns. One must acknowledge that inflation can be bad for your retirement funds and therefore you must plan accordingly. When you are planning to invest in any tool for retirement, do not forget to factor in inflation. If you are spending Rs. 25,000 on monthly expenses now, in twenty years you would need Rs. 97,000 assuming an inflation of 7% per year.
Therefore if you are to buy an Annuity plan, you must figure out the future goal amount you need for your retirement and then start saving for the future amount.
Leave EPF out
You would have come across a lot of individuals who withdraw their EPF on changing jobs or when there is a need for immediate access to funds. These are bad examples and you should stay away from them as much as possible. EPF is primarily designed keeping in mind retirements. Agreed there might be a dire need for funds, but look into other options rather than taking a dig out of your retirement fund. It will do more damage in the longer run.
While keeping the EPS amount intact is a great idea the amount not touched may not be sufficient for your retirement. Therefore, over and above the EPS amount you also need to save small amounts monthly to build annuity corpus.
Medical expenses are one of the largest that one might come across. It is no secret that medical expenses go up dramatically as you age. And if you do not plan for the same, things can become tricky and also damage your retirement plans. Thus, having a medical coverage has the potential of becoming a life saver in every sense in the later stages of your life. Your employer might have a group medical insurance in place, but given the constant rise in medical expenses, it just might not be enough. So, don’t let medical bills jeopardize your retirement plans or future plans. Making provisions of medical expenses is essential part of retirement planning.
You should save enough in annuities so that the same can take care of medical expenses over and above the regular expenses.
Setting aside funds on a regular basis for your retirement can be a very good starting point. But investing in the right tools can be the difference between a decent and good retirement portfolio. In order to beat inflation and let your investments grow at a steady and healthy rate, do not forget to add equity to your portfolio. Of course, you can reduce the exposure with age, but the addition of equity can bring about substantial growth to your funds.
Therefore, over and the annuity plan you must allocate some portion of your savings to ULIPs which invests in securities which provide market linked returns.
Don’t shy away from investing for your retirement. Start your retirement planning early in life and set aside a specific amount every month and invest in the right investment assets like buying an annuity plan and investing some portion of retirement corpus in ULIP plans of life insurance to create a corpus that will allow you to retire in grace and have a happy retirement life.