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How to do Financial Planning in your 50s?

dateKnowledge Centre Team dateOctober 06, 2021 views134 Views
Financial Planning | Importance of Financial Planning

Once you cross the 50s, your retirement is no longer a far summit. The 50s can be a perfect time to organize your financial planning for life after retirement. It's time to think about whether you have been a super-saver your entire career or you are retiring without any savings.

Let's take a serious look at the expectations you have from your life ahead. It isn't too late to take some steps and begin the financial planning to catch up with your future savings.

1. Clear the loans and debts

Clear all the pre loans and debts before your retirement and get free from the burden. 50s are considered to be a serious phase of financial planning. No one would prefer to spend their retirement time worrying about debts, loans, and paying EMIs.

Don't hope to pay off your loans and debts with your retirement fund, rather invest that money for savings. Hence it is advised to pay off all kinds of loans (home/car) before your retirement. If you have taken loans to finance the higher education of your children, try to seek a transfer of the loan to your kids once they start earning after their graduation.

2. Retirement Plan

Take your financial planning seriously without any compromises. It is expected that you make the best use of your 50's to boost your savings because you are at the peak of your career, and these few years might be the last earning years of your life.

Retirement Planning | 5 Ways for Retiring Richer

Usually, people miscalculate the amount of money required after retirement. Investing in a retirement plan is always preferable. An ideal retirement plan should earn enough to replace your income when you retire. Channel all your sources to invest into your retirement plan if you haven't saved enough for these past years.

a) Contribute to your PF account through VPF – voluntary provident fund scheme.
b) Don't spend your bonus on unnecessary things. Rather save it for future needs.
c) Your savings rate must increase approximately with every phase of your life by beginning with 10-15% in your 20's to 50% by your 50's.
d) You can incline towards your retirement plans from previous employers. Collect them all in one plan for optimal growth. Select a plan with the lowest, affordable, and most manageable fees.

3. Decrease your Expenses

The number of dependents starts dropping once you have crossed your 50's. At this stage, you are older, wiser and your income continues to flow in, which allows you to increase your savings. It is best that you strictly reduce your unnecessary expenses, try to downsize your lifestyle and increase your retirement savings.

4. Buy a Health Insurance Policy

Since you are planning for your older years, it's time to prioritize your health. Buy a secure health insurance policy with full life coverage. The medical cost is increasing rapidly, and hospitalization is most likely to drain your savings, so prepare yourself before retirement. 50s are the right time to boost your health insurance policy with top-up plans.

Here’s how you can plan for medical expenses during your retirement.

The first step is to buy appropriate health insurance or revise your existing health insurance cover. As you move towards your old age, you are more likely to get involved in medical emergencies. Hence it's important to have health insurance with sufficient coverage. Financial planning in your 40's and 50's would define a comfortable retirement.

5. Use Retirement Calculators

Online retirement calculators enable you to understand an extensive overview of the relevant components and factors affecting your retirement plan. But remember that the free online calculations made are based on assumptions.

Most of the online retirement calculators fail to accurately determine factors in taxes which causes a huge difference in the conclusions. Try to pursue the help of an insurance policy agent for planning a financial policy for your retirement.

6. Work towards your Post-retirement Career

It is always advised to engage in a job after retirement. It ensures a source of income as a backup when you enter your old age. A post-retirement job contributes to your everyday expenses which supports your financial planning. 50's is the right time to decide your post-retirement career by networking with your colleagues and friends to find possible opportunities after your retirement.

The earning stage of the 50's can be the best time to choose the next career you would like to have. Prefer a low-stress part-time job like a lecturer at a local college, working for an NGO, or working for childcare services.

7. Prepare and Educate Yourself

The 50s is the time to begin the preparations for your retirement in every aspect. Educate Yourself and become familiar with retirement accounts and how they shift or alter as you reach specific stages of your life. Refer to various resources available to learn about retirement preparation through online content, books, and classes.

If you still find it difficult to understand, then seek help and take professional advice. Check out Canara HSBC Life Insurance that offers secured and convenient retirement plans.

Financial planning for retirement is necessary as it acts as a support system in your older age. While 50s is the most appropriate phrase to maximize your savings to prepare you for retirement and live a relaxed life.

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