A lot of us have the habit of procrastinating our plans but one should not delay retirement planning. If you wish to live your golden years in ease and comfort and you should act immediately and make retirement planning your top priority. Do not delay the start of staring with retirement planning as the early you start the more years you have in hand to accumulate wealth.
Planning for your retirement with conservative investment avenues may not be a smart idea because they are offering really low returns these days. The interest rate on bank FDs has slumped down to 4% which is ridiculous and unacceptable. What can you possible earn by earning annual returns worth 4% even if you had a long term investment horizon spanning over 25 to 30 years? Instead, if you carry risk appetite of some degree and do not mind investing in a market linked scheme that offers active risk management and diversification, you can plan your retirement with mutual funds.
Here are 4 reasons why retirement planning should be on your top priority –
Protect your standard of living
Have you imagined how life can come to a standstill once you stop earning? We are used to a certain lifestyle, a lifestyle which we can afford at this point of time in our lives because we have the financial resources. But have you ever wondered that you may have to cut yourself off from all the worldly luxuries once you retire? You may even have to start living on a fixed budget and keep all unnecessary expenses to minimum. If you wish to continue with the comfort zone you are in right now even after you retire then you will have to start accumulating retirement corpus from now.
Protect your health
At this stage in your life you might be feeling fit as a fiddle but with growing age come ailments. The examples are endless, heart diseases, diabetes, hypertension etc. these are just few of the many diseases that come with old age. You do not want to depend on your children to take care of your medical bills as you grow old. If you haven’t invested in a medical plan than building a commendable retirement corpus should be on your mind so that you can take care of all the medical bills if in case any exigency strikes.
Lack of pension plan
Private firms do not have a pension policy for their employees. Earlier, government employees were entitled to pension scheme but now the government has taken away that as well from most of them. Since you will not receive any pension and the only savings that you will have is probably the one that were deducted through employee provident fund, you may have to focus on building a retirement corpus that will help you take care of the basic monthly expenses like utility bills, house rent, groceries etc. You must ensure that you have enough corpus accumulated that it sustains you at least for the next 20 to 25 years after you retire.
Fulfil your retirement goals
People work hard their entire lives so that they can achieve certain goals. You must have promised your spouse to take them on a world tour after you retire, or you must have a destination wedding in mind for your daughter. Any such long term goal that requires a wealth creation plan can be achieved by investing in mutual funds. However, investors are expected to keep a well-diversified portfolio so that they are able to fetch maximum returns over the long haul and ensure that they live, and fun filled retirement life.