When one thinks of an efficient future plan, retirement planning is definitely one of the main things on the list. Making sure you build up enough savings to have a comfortable post-retirement life is very important if you are one to value independence.
Retirement planning is a part of your financial planning that needs to be taken seriously as you only get one shot at it. When done right, you can rest assured that when the time for your retirement comes, you can just sit back and enjoy the luxuries of retired life.
Retirement planning is important as many save that period of their life to be full of excitement and fun that they have otherwise missed out on. Not being adequately prepared on the financial front will only put a dent in your plans and ruin precious time that you’re supposed to be spending with your loved ones.
So, to make sure you get it right, here are a few common mistakes you should avoid when choosing retirement plans:
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1. Not Starting Early Enough
It’s never too soon to start investing for your future, so whenever you start earning, it’s best to start your retirement planning right away. Assuming you start at a young age of early to mid-twenties, by the time you retire, you’re gonna have a comfortably sized pool of savings to use and live a comfortable life.
2. Not Paying Off Debts Before Retirement
No source of income and a limited pool of funds is not a good combination if you have not paid off the debt. This can be a difficult situation to manage, so it’s best to try as hard as you can to pay off any mortgages, debts, loans, etc. before you retire in order to lead a stress-free post-retirement life.
3. Not Taking Health Care Expenses Into Consideration
As fun as retirement can be, it is also a time in your life when you’re old and potentially vulnerable to different health issues. Even if you aren’t already a patient of any illness, it’s best to think of medical expenses when choosing a plan. With the increasing medical costs, any encounter with the hospital can take a good chunk of your finances, so avoiding this mistake is a must.
4. Not Thinking Hard About Your Coverage Amount
One of the first steps to choose a retirement plan is thinking of your coverage amount. Many tend to baselessly choose a random figure that they think will suffice, but it’s best not to do that. Take your current income, current expenses, retirement age, current age, future expenses, inflation, taxes, etc., into consideration before you settle upon a figure.
Avoiding these retirement planning mistakes is a surefire way to cook up a solid plan for that time of your life. It’s also important to remember that you’re free to customize retirement plans as you wish to personalize it, so it best suits your needs.
Take a look at the retirement plans offered by ICICI, a trusted insurance company in India that will surely point you towards the right plans.