After working hard for most of your life, retirement years are among the best in your life. Now is the time to enjoy the efforts of your labor, relax, and enjoy the remaining part of your life with your loved ones. To ensure these years are not wasted worrying about money and finances, planning for retirement early is very important.
Most people start saving from the day they begin working. However, there are several common mistakes made by them that leave them financially dependent on their children after they stop working. Avoid these pitfalls to enjoy the golden period of your life.
Failure to plan
The majority of people fail to estimate the amount they would need after they retire to continue sustaining their lifestyle. Sadly people plan for short-term goals, such as marriage or vacation but fail to plan for the larger picture. Setting up measurable and specific goals and writing these down before implementing a stepwise process to reach your destination is an important component of retirement planning.
Not starting early
If you do not take the initiative then nothing will get done. Most people believe there is a long time before they retire and fail to start saving early on in their careers. This is a vicious cycle because as you grow older, your financial needs change with the focus on family, children education, and home mortgage. All this leaves you with little or no money for saving and planning for your retirement. Don’t get caught up in this and begin early to ensure you are financially independent even after you stop working.
Underestimating medical costs
Many employers do not provide health insurance to their employees. Additionally, almost no private company in India provides health cover to retired personnel, which is why estimating healthcare costs while making retirement plans is very important. While calculating these expenses, you need to remember the effect of inflation because these are in all likelihood not going to be incurred much later in the future.
Premature use of retirement money
It is very common in the country for parents to prematurely withdraw money from their pension or retirement funds for various purposes, such as higher education or weddings. However, this is a grave mistake and must be avoided at all costs for a safe financial future.
Higher spending post retirement
Many retirees think there is plenty of money in their retirement plans and often end up living a very lavish lifestyle in the initial period after they stop working. Although traveling to different places, remodeling the home, or spending money on things you wanted to do in the first few years post retirement is very tempting; you must not fall prey to these. This can lead to disastrous financial situations in the later years causing grave difficulties. To avoid all these mistakes, check the retirement plans in India and decide on the one that best suits your personal situation and requirements.
About HDFC Life
HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions.
