Some people think fondly of spending a comfortable retired life, while some dread reaching retirement age. The difference in this approach may speak a lot about your attitude towards life, but eventually it comes down to whether you have saved enough for your retirement or not.
Living a retired life without enough savings can really be a dreadful experience. If you and your spouse don’t want to be a burden on your children after retirement, it is best to start retirement planning early and stick to the retirement plan by all means.
Don’t make the mistake of relying on others – even if they are your own children – to take care of you when you have reached your twilight years. Why should you rely on others post-retirement when you lived all your life on your own terms? To live a comfortable retirement life on your own terms, you need proper retirement planning and to achieve that you need to avoid these common mistakes.
#1 Shortfall of retirement corpus
Imagine this situation. You are about to retire in a year but you’ve only been able to save enough to last you another 5 years, while you have perhaps 20 more years to live. This often happens if you fail to correctly calculate the retirement corpus. In a number of cases, retirees miscalculate the required size of the retirement fund. They end up having to rely on their working children, or worse, getting back to work again, if they can.
#2 Not taking inflation, life expectancy and tax into account
Shortfall in retirement funds occurs when you don’t take into consideration important factors such as inflation, life expectancy and tax liability. Let’s see how each of these factors affect your corpus.
Average Life Expectancy As Per Current Age
#3 Not starting early
Whether you want to retire early or late, you have to start early to build a sizable corpus. Healthy retirement funds are built utilizing the power of compounding and that only works when you start early.
Whether you are buying a term insurance plan or a ULIP retirement plan, the premiums increase with age. When you start early, you are able to purchase more fund units or NAVs at a low premium and thus maximize your returns. Don’t delay in investing for your retirement or you will regret the decision after your retirement.
Quick tips on retirement planning
Unit linked insurance plans (ULIPs) allow you to have a robust retirement plan as it provides the triple benefit of insurance protection, wealth generation and tax savings. ULIPs have consistently provided returns at the range of 9-12% and they are the most tax-effective investment instruments available in India. Start investing for a comfortable retirement life with Invest 4G ULIPs from Canara HSBC Oriental Bank of Commerce Life Insurance.
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