Many
people want to save enough money for their future so that they can retire and
enjoy their life in a peaceful manner. They always worry about how much money
would be enough so that they can survive the rest of their lives without having
to work. In this regard, let us discuss some crucial issues you need to
consider when you are planning to retire. While some people feel that having
one crore is sufficient to retire, few others feel that they need more than 5 crores
to be able to lead a comfortable life in future.
Factors
to consider before planning your retirement
There
are many factors you need to consider before thinking about retirement.
Remember that it is not a simple decision to take in your life and you will be
leaving a steady source of income in most cases when you retire from work. The
job market is very competitive and it may not be very easy to get a suitable
job in future when you stop working for few years. In this situation, if you
are past the age of 50 and thinking in this direction, it makes some sense.
However, if you are still in your 30s or 40s and looking forward to retire
soon, you need to be aware of various factors that can affect your life in
future.
Current
earnings and savings
To
begin with, you need to have good earnings and proper savings in order to think
about retirement. If you already have more than few crores of savings, you can
consider this option in the near future. Yet another factor you need to
consider is your current earnings and see if your retirement income can match
up to your current earnings. In this way, there will be no changes in your
standard of living and you need not have to compromise on any aspect in future.
When you have proper retirement planning, you will be able
to lead a comfortable life without any financial problems.
Inflation
Even
though you have few crores of savings in your bank, you need to consider the
inflation factor as it can reduce the value of your money in a drastic manner.
Remember that money kept idle keeps losing its purchasing power and you will
not be able to realize its complete potential if it is not invested in a proper
way. Just imagine what all you could buy with 100 Rs when you were young and
compare that with what you can buy with the same amount today. This will help
you to realize the power of inflation and you need to understand that the same
will happen to your savings in future. For this reason, your retirement
planning should factor in the rate of inflation and ensure that your savings
will be enough to handle your future expenses.
Standard
of living
It
is generally not possible to drastically reduce your standard of living just
because you have retired from work. In this situation, you have to consider
this factor when you are thinking about retirement planning.
What will your current standard of living cost in the next 10 years when you
consider the fact that prices of different commodities will continue to rise in
future. If you have clarity on this question, you will get a clear idea about
how much savings you need so that you can maintain the same standard of living
for your entire life without making any compromise.
Health
issues in future
When
you are young and having good earnings, you will generally not have too many
health issues. In this situation, your health expenses will also be very less
and many people do not plan properly with regards to this issue. You need to
understand that your health expenses are likely to increase in future as you
get old and you need to be properly prepared to fact this issue. For this
reason, your retirement planning should include appropriate health cover
throughout your life and this should not give you any shock in future.
Insurance Cover
You
should also have good insurance cover even when you have good savings. This can
help your family members to lead a comfortable life financially even during
your absence. Apart from that, investing in good insurance plans can also
provide you benefits at a later stage to meet your future expenses. You can
even consider buying few pension plans as part of your retirement
planning and this can ensure a steady source of income for you in future.
Sources
of Income
You
should never depend on one source of income after your retirement and this can
save you from many financial problems in future. Always plan your investment in
such a manner that you will get income from different streams like pension
income, rental income and other sources. In this way, even if one source has
some problem, you can lead a comfortable life with the other income.
To
finally answer the question of how much money is enough for you to retire, you
need to consider all these factors and work on your retirement planning. If you
are able to save nearly 5 Crores, you can easily consider retiring as this will
be more than enough to lead a comfortable life provided you invest it
carefully. Always consider insurance as the first priority and then choose a
good health cover policy. Once this is done, you can focus on a good pension
plan that will give you regular income on a monthly basis. When you have all
these things covered, you can continue to work if you are passionate about your
job or choose to retire and lead a relaxed life.
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