A beginner’s guide to a rocking retirement
Isn’t it nice to go on a yearly family vacation, enjoy the latest movie every other week, and host parties at your home for friends and family? But have you ever given a thought to what your future will look like once you retire? Retirement planning may not be on your priority list today. However, with a retirement plan, you can enjoy the same comfort and lifestyle even after you retire.
Here are 5 simple steps that you can follow to get ready for a rocking retirement:
- Define what you want to do post retirement
The first step towards preparing for retirement is to clearly define what you expect from it. At this point, don’t worry about the budget; simply note down the specifics of the things you’d like to do. For example, if you’ve always dreamed of travelling, then instead of writing, ‘travel’, you could be more specific and write, ‘go on a Euro tour’. Or if you wish to do social work, instead of writing ‘social service’, you could be more specific and write ‘be an active member with an NGO supporting the cause of child education’.
- Invest in yourself
As per data collected by a recent study, the average life expectancy for an Indian over the age of 60 is 17.9 years*. By pursuing your hobbies, you can make your retirement years feel like a breeze. If you are passionate about playing a musical instrument, you could take classes at home. Similarly, if you feel the years of experience have taught you invaluable lessons, you could consider giving guest lectures at colleges. With these skills and hobbies, you can not only pass the time, but also earn while doing something you love.
- List down your expenses and prioritize
Listing down your expenses will give you a clear picture on how much money you would require each month after you retire. Whether your retirement is many years away or just around the corner, managing your expenses, will allow you to live this phase without any worries. For example, you could start carpooling to work every day instead of going by a private vehicle, etc. Even these small expenses can add up to a big number over time and these additional savings can be invested to enjoy a carefree retirement.
- Don’t delay planning for retirement
The need for saving for your retirement cannot be overemphasized. You need to keep in mind that once you retire, you might not have a steady source of monthly income. In addition to this, there is ever rising inflation and unforeseen medical expenses that you will need to take care of. The sooner you start saving, the higher your retirement savings will be.
For example, if you want to retire at 60 and invest Rs. 1 lakh every year from the age of 35, you would have saved Rs. 78.95 lakh (assuming returns @ 8% p.a.) or Rs. 43.31 lakh (assuming returns @ 4% p.a.). But had you started 5 years earlier, at 30, you would have saved a much higher amount of Rs. 1.22 crore (assuming returns @ 8% p.a.) or Rs. 58.32 lakh (assuming returns @ 4% p.a.).*
*Illustration figures are based on compounding values. The returns shown above are not guaranteed and they are not the upper or lower limits of what you might get back, as the maturity value of policy depends on a number of factors including future investment performance
- Ensure Regular Income Post Retirement
As mentioned above, you might no longer get a monthly income. But this can be solved by using your retirement savings for purchasing an annuity plan. An annuity plan can provide you and your spouse regular monthly income for the rest of your lives. This takes care of the risk of outliving your savings and gives you the financial freedom to live life on your own terms.
Easy Retirement by ICICI Prudential Life is a plan that not only offers you regular income during retirement but also helps you grow your savings during your working years. With this plan, your money is partly invested in equity and debt. It comes with the added advantage of tax saving and ensures the supply of regular income to your family in your absence. With these benefits, you can grow your savings and beat inflation.
Unit linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.
Advt No. L/II/0787/2016-17. ICICI Pru Easy Retirement (UIN: 105L133V01)