This is perhaps why one of the major goals for life post-retirement is traveling the world for many of us. While the well-traveled ones seek one more chance at visiting their favorite destinations without having to respond to e-mails or worrying about extended leaves, those who haven’t explored multiple continents hope they will have the time to do it once they retire.
But, what about the money?
Even today, foreign trips cost a lot of money. This is only set to get more expensive with time. And post-retirement, you won’t even have the cushion of your regular job to finance that three-day cruise in Italy. This is why it is important to start retirement planning well in advance so that your life goals don’t get derailed post-retirement.
Here are some of the things you should keep in mind for your worry-free retirement planning:
1. Be clear on your goals: The retirement planning process is incomplete if you don’t know what your goals are. Do you just want to live a peaceful life away from the city? Or do you want to see the world? Do you want to maintain the same lifestyle or would you want to upgrade to more luxury? Answering these questions objectively will give you clues on how much money you are likely to need.
2. Plan long term: There’s a reason why people always talk about time value of money. It’s nothing but a fancy term to imply that money grows at an exponential rate if it’s invested for a longer period of time. Retirement is no different. Starting early is the key.
3. Understand retirement benefits from your employer: Retirement benefits differ one organization to another. You must understand the benefits offered by your organization to know whether they will be enough, and if not, what the shortfall is going to be. It will help you align your financial plans with your life goals and make sure that there are no surprises.
4. Choose the right instrument:Retirement planning is as much about planning as it is about executing. You may have a strong plan in place but it’s worthless if you don’t choose a relevant instrument. Think about new-age ULIP as one of the option, which not only give you a life cover, but also market-linked returns which have potential for larger retirement corpus. Few new-age ULIPs also come with a regular income for whole life like a pension plan, enabling you to cover your lifestyle.
5. Stay invested for long-term: As retirement goals have a longer tenure, it is best to give your investments ample time to grow. Here staying invested for the long-term is the key as the power of compounding will help your investments generate a larger corpus over the long term. It may also be a good idea to diversify your investments for countering market volatility related factors.
The key to a good retirement is a simple combination of timely planning, a suitable investment plan and disciplined investments. With these arms in your coat, you can’t go wrong. If you are confused about where to begin, use our retirement calculator to find out how much money you might need post-retirement to fund your living expenses. Then add some more for your travels and you’re set. Bon Voyage!
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