5 Golden Rules to Bring Your Retirement Planning on Track (2024)

Yes, it is a way to explore the world and do things you intended to do when you didn't have the time! So, what will keep you going to accomplish your goals in your retirement life? A weak financial condition! Well, yes! Many of you often invest in retirement plans. But have you done justice to your hard-earned money? Is your retirement plan on track? If not, here are five golden rules to do the same! So, let us get started!

1. Evaluate Your Retirement CorpusInvesting in retirement plans is not just the right key. It would be best to do it proficiently to reap more returns. So, how to go about doing it? Well, you can start by calculating your current monthly expenses. It will include your household expenditure, medical expenses, etc. There are other entertainment expenses and family commitments too.

   If you want to lead the same kind of life after your retirement, you should plan for a retirement corpus that is at least 20 times your current expenses. On the other hand, you can also account for at least 6% inflation and evaluate your financial needs.

2. Choose Retirement Products WiselyFinancial service organisations such as insurance providers offer various retirement solutions to safeguard your life. You must choose the right product for your financial needs. For instance, if your family has a good legacy leaving behind a house property for you to settle down and independent of your earning, you have to work on an annuity plan to manage your routine expenses and other short-term emergencies.

   On the other hand, if your family is dependent on your earnings for their survival, you have to ensure a financial condition to secure their future with the retirement plan. In such cases, you have to research and get introduced to the varied retirement plans available, compare their benefits and choose the right solution. Insurers also provide flexible features to enhance the plan based on your needs. So, you can always reform the basic plan to accommodate your financial goals based on the current flow of income. Therefore, choosing the right product will help you invest better and earn well.

   Annuity insurance and pension plans from life insurance companies are considered a reasonable choice for good returns, flexibility and tax* benefits. Immediate and deferred

   annuity plans are the two most important choices made in retirement plans. The immediate annuity option starts providing the regular income immediately, while the deferred annuity option defers the beginning of regular income payment later.

   Also, the Income Tax Act, 1961 provides tax* deduction benefits up to ₹1,50,000 on investment plans under Section 80C. And Section 80CCC is a subsection that allows for a deduction on the taxable income for annuity plans issued by life insurance companies. Therefore, when you buy an annuity plan ensure you receive the maximum benefits while saving on tax*.

3. Increase Your Investment When Your Income IncreasesEarly retirement planning is the best way to start. As your commitments are less, you tend to invest more. Also, you will develop the discipline to invest regularly. However, with increasing family commitments and standard of life, you will have to start investing more to retain the same standard after retirement. And, to do so, you have to increase your investment amount with the increase in your annual income. This will help your retirement planning stay on track with the increasing inflation rate.
4. Keep Revising Your Retirement PlanYou must have witnessed a lifestyle change, increased financial investment products, and corresponding features. Financial service organisations keep modifying the products to benefit the customers according to the rising needs. Therefore, you should keep yourself aware of such developments and keep improvising the investment in retirement plans to keep it on track.
5. Stay InvestedThe final and most important golden rule to keep your retirement plans on track is to stay invested. It is evident that the longer you invest, the better your returns are. Unfortunately, some individuals keep withdrawing funds from retirement plans to fulfil temporary family obligations or to manage an emergency. While it is difficult to handle such a financial crisis, it is better not to disturb your retirement funds to receive better returns later when you are in need.

Conclusion

Retirement plans are important to lead a happy and peaceful retirement life. It ensures that you stay protected and ascertain financial assistance in an emergency when you grow older. You must have started investing in a retirement plan from a young age. However, it would help if you made the necessary efforts to keep your retirement plans on track for the best returns.

Evaluating the retirement corpus taking into account the inflation rate, choosing the right retirement solutions, increasing the investment with an increase in your income, revising the plans, and staying invested for a longer period are five golden rules to keep your retirement plans on track. Follow these rules and realise the importance of retirement planning to fulfil your financial goals!

L&C/Advt/2022/Nov/2723

People Like You Also Read