Why Do You Need Retirement Planning?
The Best Approach To Retirement Planning
Retirement Planning With PersonalFN
Why do you need to plan your finances for retirement?
To cover daily living expenses :
All of us have to bear the necessary living expenses even after retirement. Because life moves on and the absence of our monthly income could become a nightmare.
Retirement planning is working towards avoiding this nightmare from becoming a reality. Not many people get pensions or gratuities post retirement and even for those who do receive them; the amount is generally not big enough to cover all of their expenses.
By planning and building a sizeable retirement corpus, you can ensure that your family’s standard of living is not compromised post retirement.
To cover medical expenses :
As one’s age progresses, the number of health issues and emergencies also increase. And as you might be aware, medical expenses bear the potential to create a huge hole in your pocket. In fact, these days even dental treatments can cost you a small fortune.
Mediclaim or health insurance policies sometimes may not cover all your medical expenses.
Therefore, your retirement corpus must be large enough to cover your and your family’s medical expenditure to avoid a financial crunch in the later years of life.
To fight inflation :
Inflation refers to the rise in the prices of goods and services. It erodes the purchasing power or value of your hard-earned money.
You see, there has been constant rise in price of goods and services and it will continue to be on a rise until you reach the retirement age.
This means that you would have to pay more for everything in the future. From grocery to travel to accommodation, it is all going to cost you relatively more in the future.Without a sound retirement plan, that aims to establish an adequate retirement corpus accounting for inflation, life expectancy, rate of return, and so on; it would be impossible for you to achieve all your retirement goals.
To deal with uncertainties :
Life is quite unpredictable and uncertain. It can sometimes throw us in adverse situations and circumstances which we may not have expected.
Some situations have the power to create a financial as well as emotional turmoil in your life such as natural calamities, loss of loved ones, financial difficulties in the life of family members, and so on.
Having a significant sized corpus to take care of such contingent events can always come to your rescue.
Thus, while you approach retirement, it is imperative that you have a sufficient contingency fund, so that the intermediate period of turbulence and turmoil can be managed better and not hinder your long-term goal of retirement.
To meet your retirement goals :
Retirement goals are the objectives that you wish to achieve in your retirement years. These could be travelling and exploring new places or taking up hobbies that you have always wanted to pursue.
However, if you do not plan and save for all these retirement goals in your working life, they cannot become a reality in your post retirement years.
Hence, it is absolutely essential to have a strong Retirement Plan that will make you aware where you stand today, and what steps you need to take to achieve this goal