Are you on Track Towards a Peaceful Retirement? Here’s How to Check
The World Economic Forum (WEF) recently released a report that has predicted
alarming post-retirement financial inadequacy. It is found that there will be a $400 trillion
deficit in retirement savings in eight countries by 2050. In its joint report with Mercer,
WEF revealed that the retirement savings deficiency in India was expected to touch $85
trillion by 2050 from the current shortfall of $3 trillion. The disturbing increase of the
shortage is primarily due to reduced savings and longer-than-expected lifespan of
Many times, we think that our regular savings might be able to take care of the
expenses after retirement. However, the one factor we tend to ignore is the rising
inflation. The cost of living right now might not be the same 10 years down the line. The
stats above show the deficit amount in retirement savings in the coming years. These
alarming stats show that you might need to focus more on your savings to have a
peaceful retirement. There are many articles you can read for advice on this. For example, you could follow these recommended steps to retire peacefully.
In this article, we have provided a checklist that can help you find if you are on the right
track towards a peaceful retirement. So, read on to find out.
You Have Specific Retirement Goals
Setting goals is the first and most essential step towards achieving them. Everyone has specific things that they wish to do after their retirement. Be it travelling, pursuing a hobby or learning something new, all these require significant amount of savings.
If you have set a target date of your retirement, you are on the right track, as knowing the right time to step away from your business or caeer is half the battle. The next step is to make a budget for your retirement. It will help you in finding out how much money you will need to last through your golden years. The thumb rule to this is the “four percent rule“ (the amount a retiree should withdraw from his/her account each year) to help them determine how much they’ll have to save.
You Have Diverse Investment Portfolio
A diverse investment portfolio is vital for a healthy retirement. Majority of the times people rely on their EPF and PPF accounts for their retirement money. However, it is a wrong approach. The amount received from these instruments might not last through your golden years. You will need to invest in more instruments like ULIP insurance plans for a peaceful retirement.
By investing in ULIP pension plans, you can make sure that you have enough money post-retirement and life cover. There are many other kinds of retirement plans available in the market that can help in achieving financial goals while providing exceptional benefits. Leading insurers like Max Life Insurance also provide the option of choosing lump sum payout or monthly payouts as per the needs of the customers.
When it comes to having a diverse investment portfolio, it’s not just stocks and bonds that you should have. It also means investing in something that is physical, like precious metals as this can benefit you when saving for your retirement. Gold and silver investments that you make with your precious metals IRA’s can help to protect your wealth, as unlike other investments, they won’t be affected by the economy. This means that your wealth has a better chance to grow as its value shouldn’t decline. Places similar to Lear Capitol can help you with your journey to retirement and will make sure that you are making the best investments for your financial needs. Financial security is vital, especially when it comes to your retirement years.
You Know About Tax Saving Options
Taxes eat up a lot of your earnings. However, if you know about various tax saving options, you can save a good amount of money and save it for the years to come.
Your pension plans, EPF and PPF accounts are all eligible for tax benefits up to Rs. 1,50,000 under Section 80C. Investments in ULIP pension plans are also eligible for tax benefits. The maturity amount received by the policyholder is exempted of taxes due to the ULIP taxation criteria under Section 10(10D).
You Track Your Expenses
“You have to know your spending habits before you can plan your retirement.” Whether you jot down your buys in a spreadsheet or use an app, you need to track your expenses. It will help you in finding how much you need to fund your lifestyle. In fact, many early retirees start their journey to financial independence by evaluating their expenses and finding out exactly how much they needed to retire happily.
When preparing for retirement, the sooner you begin investing, the better off you will be, thanks to compounding. And even if you began saving late or haven’t started, it’s essential to know that there are ways that can help you in increasing your retirement savings. “It’s never too late to get started.“ So, hurry up and start saving.
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