Retirement brings the leisure time we all cherish, but it also brings the flip side, we don’t earn during this period, not, at least, actively. If planned well, your retirement will be like you see on those insurance companies’ ads— smiling, happy and enjoyable. We do want to see you like that, in some 30 years. Here are our ideas for you to be the proverbial happy grandpa.
Invest in Retirement/Pension Plan
There are several myths regarding this. “I am too young to invest in retirement plans” is always there. However, if you do basic mathematics, you will realise investing Rs 1000 per month from the age of 25 will yield much more return than investing Rs 5,000 from the age of 35. The reason is simple; you are giving your money, more time to work. There are many online calculators which you can use to see the difference; you will retire much richer if you start investing early even if the investment amount is much less due to the power of compounding which needs time to create some magic.
The opposite myth is also there and circulates a lot, “I am too old to invest in retirement plans”. This is not true either. You can be 35 or 40 and start investing. Yes, you would miss the returns of the first ten years, but you will still give your money some 20-25 years to work in the market. This would be sufficient time for your money to give you the financial security you need when you retire.
There are several pension plans with different repayment options. I am no financial wizard, but I would suggest that you go for the yearly-increasing monthly pension with a death benefit for the spouse. This will keep you safe and keep him/her safe after you are gone.
Invest in the health/medical plan
With age, especially after retirement, our expenses increase, and our revenue dries up. This increase is mostly due to the medical bills which we need to pay, and they tend to become regular and larger in the old age. A health insurance plan, or mediclaim as we Indians are fond of calling it, is always a wise investment. It keeps you safe financially because all your bills are paid by the insurance company. You can add some fringe benefits as well, especially against treatments of some common threats like cancer, kidney failure, etc.
Don’t wait for retirement to buy the plan as these plans have the highest entry age, which is less than 60, in most of the cases, except senior citizen health insurance plans. You would get the protection from day 1, figuratively speaking, if you invest in these plans now. Moreover, you can add your family members in these plans which costs lower than buying separate plans for each of them. We would recommend that you invest in a health insurance for the family now so that the medical bills become history for you.
Health is the second biggest investment of your life, only next to the character, and we would strongly suggest that you invest in it. While you are taking a health plan, it doesn’t imply that you can be reckless with your health. OK, I accept that you will not have to bear the medical expenses, but do you want to spend your retired life only visiting clinics, hospitals, and pathology centres? Would you love to become a burden or do you want to keep your retirement life to do things which you always wanted to do but never had the money or time for? It’s your call. Quit smoking, quit drinking (or at least, lessen those) and live on a healthy diet. Add some exercises in your daily routine and stay fit. You will realise the worth of it during your retirement years.
Postpone some expensive ideas
You might have some fancy idea, I do cherish the dream of a personal library with books stacked neatly in pristine condition on real teak bookshelves. Some might want to roam around the world or take luxury leisure trips on a yacht. Whatever your dream might be, if it is too costly, try to see if you can postpone it till retirement. Create a bucket list instead (Watch the Anthony Hopkins, Morgan Freeman starred film of the same name, you will thank me for suggesting it) and invest the money.
When you retire, you will get a lump sum, from most of the plans, and you can spend this money on your bucket list, knowing now you can choose to be carefree as very few and very little responsibilities are on your shoulders.
That’s it. If you follow these, you will have a great retirement life and also enjoy life after retirement, something which many Indians miss. You will be a shining example of what a planned retirement can be like, but yes, the planning needs to start early in the life. Have you planned yours yet?
By: Deepti Verma