Securing our future at every stage is very important and there are plenty of ways to do that. We all watch our parents talk about why you must save money, or spending money on the right thing is important. We don’t end up realizing that when we are young, we realize these things once we are adults when we have responsibilities, family to take care of, kids to take care of.
There are many ways of securing your future, one being the investment plans that let you save money until you retire. From the time you decide to invest in a retirement plan, you contribute a certain amount on a regular basis. Once you hit the retirement stage and your office income stops, you start getting a fixed amount in intervals from your retirement plan.
Retirement Planning – Overview
Retirement plans have plenty of benefits and help you stay secure without worrying about the income coming in. with the income that you receive from your retirement plan; you can utilize it for your daily and basic expenses. There are plenty of plans based on the needs that you can choose from.
12 Reasons Why Retirement Planning is Important
Investing in a retirement plan is important you know already know that by now. But why is it important, let us understand that and div deeper into helping you understand and secure your future?
Here are top reasons for you why retirement planning is important:
- Keep Stress at bay: many health problems occur due to lack of financial income and not being able to fulfill basic needs. Money problems lead to feeling anxious, depressed, and constant sadness! Taking care of your overall financial wellness will only keep your health and future secure.
- Leave your legacy: your retirement savings can be planned well in advance and even after you have lived your life, you can pass on your life savings to your loved ones to live with ease.
- Maintain your lifestyle: if you have been living life king size throughout, you can continue living the same way with your retirement income. You won’t need to sacrifice your lifestyle
- Independent living: having a smart retirement plan will help you stay independent and you will not have to rely on your children to provide you with income.
- Medical Expenses: as you grow older, your body will need to be taken care of in terms of medical requirements. Your retirement plan can secure you with the medical bills or hospital bills for the future.
- Relief From Tax: every individual that earns money wishes to reduce their tax charges and have maximized the savings. Our government exempts tax benefits on various financial tools, which can be included in your retirement plan. It is an effective way to plan & secure your future and save money at the same time.
- Tick off that bucket list: your retirement plan savings can be utilized in your newfound hobby or your long-lost passion that you always wanted to take up. Maybe you always wanted to start a small business or a new in-house activity or you wanted to learn something new. You can do it all with your smart retirement savings.
- Living at ease even with inflation: inflation keeps increasing every other day and can be a burden in the future with no job or savings. But, if you have secured your future along with a retirement plan, then even inflation will not bother you. You can continue living in peace.
- Retire Early: if you have started your retirement planning at a young age, you can retire early. You don’t have to wait until a certain age to retire. You can rest assured that your plan will have you covered for a long time.
- You won’t have to sell off your assets/ property: if you plan well for your future or old age, you won’t have to reach a situation where you will have to sell your valuable assets or property to make a living.
- Choose plans as per your lifestyle: if you have a very simple lifestyle, you can plan your savings for retirement accordingly. Maybe you live alone, you have been unmarried, or widowed, your expenses will be far less. You can save accordingly to have enough amount for yourself.
- Save that extra money: if you plan at an earlier age, you save money on your retirement plan rather than planning for it in your retirement phase. Start early, save little, get more, have a relaxed future.
When Should You Start with Retirement Planning?
Looking for a safe retirement plan is very important to stay financially secure. A systematic retirement plan will let you understand your life goals. Here’s why you should start planning early.
At every phase in your life, your income or financial profile might look different. It is always advisable to start planning at an early stage in life. You get enough time to invest over a long period of time thereby reducing the burden at a later stage.
Typically, your retirement planning should start at the age of 30 when you can afford to save or invest a decent amount on a monthly basis.
Retirement Planning: FAQs
You might still have some questions that need to be addressed, hence we have jotted down some important questions that you might feel is important & we are here to help you out.
Q1. What Is The Best Retirement Plan If I Am Self-Employed?
– As a self-employed person you don’t have access to the PPF or LTA to depend on, but that does not mean it is not possible to have a retirement plan. For starts, you can identify your family needs and income flow & decide a saving pattern for your future. Check for various investment plans that offer great benefits and returns and start planning.
Some ways where you can invest –
- Mutual funds
- Infrastructure bonds
Q2. What Happens In Case Of An Individual’s Demise Before Withdrawing Retirement Benefits?
– If you are a nominee, to avail of the retirement benefits you (the nominee) will have to fill a form of Composite Claim Form In Death Cases with the regional office or online. The nominee should have their Aadhaar card which should match with the records that were submitted by the deceased person.
The nominee will then be eligible for the pension/retirement income on a monthly basis if the deceased has been dead during his service. In case the deceased has passed much after his service years then the nominee will be eligible for the pension as a lump-sum amount during withdrawal.
Q3. Should I Choose Lump Sum Payment Or Monthly Payment of Retirement Funds?
– Large access to money can give you the liberty to be flexible with your expenses or investments. But it may make you spend more without worrying about the future which can be a negative thing.
Regular/ monthly retirement funds come in with a specific amount that can help you plan out your monthly expenses and not go beyond that.
A 2020 report by the Consumer Finance Protection Bureau found that retirees with pension income were far more likely to remain financially stable than those who had cashed out the lump sum. 73% of those with regular payments could maintain the same spending levels after five years, compared to only 56% of those who had chosen the lump sum.
Q4. How Do I Determine My Long-Term Financial Goals?
– Based on your current lifestyle and expenditures, this should be an ongoing process where you keep setting short-term, and long-term financial goals. Make monthly budgets as per your expenses and see where you can save more every month. This will help you calculate your genuine expenses vs unreasonable expenses. Planning for the long term is always a smart thing to do. If you start taking care of and managing expenses well, you can see yourself with a secured amount for your future.
Q5. Should I Save For Retirement Or Other Major Life Expenses First?
– saving for your major life expenses is as important as saving for retirement. You can do both if you plan smartly. Your certain % can go into your retirement savings and the other % can go into your other important expenses. Making smart and wise decisions is the way to go forward.
We hope that you have got a basic understanding of why retirement planning is important and how many ways it can benefit you, your future, and your family. As you grow older, you will understand the importance of saving money on the right things. If you start early, you get more time to save, and you can even choose to retire early.
Get Expert Help To Choose Retirement Plan
With all these benefits one can’t deny the fact that this is indeed a massive investment break that you must not give up on.
Start today! We have helped many out there to secure their future. Let us secure yours’s too. Let your future be in our hands where we help you plan for your future from today. Visit retirement planning consulting services or Just Call us on +91 20 25551000 for more details.