Retirement heralds the beginning of a new phase in life wherein everything is suddenly different. Standard of living assumes new dimensions, healthcare facilities become vital, safety from external influences such as weather and crime gets important, and the equation with kids grows even more profound.
With so many big changes associated with retirement, it is critical to understand how you can take care of everything well by planning for your post-work life finances properly. So here are some tips which will help you achieve your retirement goal of living comfortably in an urban city.
First things first, it is important to invest money aggressively in a multitude of investment options to reap high returns in the longer run. Investment, like any other good habit, takes time to cultivate. You should take a disciplined approach to investing. Some basic investing and money management rules go without saying – diversify your portfolio, invest as per your risk appetite, invest only after you have enough liquid cash on hand to take care of your routine expenses and any contingencies. Once you know what works best for you, you can create an investment chart that takes care of your retirement goals.
Account for external factors
It goes without saying that inflation will have a key role to play once you retire. So while calculating the amount of retirement corpus you need to build to maintain your current standard of living in an Indian city, factor in the current and expected future inflation rate. Accordingly, calculate the funds you will need post-retirement and start directing your savings towards that goal.
Small Savings matter
When you are planning to retire in an urban city, it is a given that you need to save money wherever it is possible (without compromising on the necessities of course). Do away with all frivolous expenses that are eating up into your monthly budgets. Heading to work? Car pool with colleagues and save your fuel expenses. Albeit small, these significant steps can make a world of difference when it comes to savings.
Plan taxes effectively
When you are investing money and generating returns from it through accruals of interest, take cognizance of the fact that you are also inviting taxes on the interest income. So invest in avenues where you are eligible for tax exemption under different sections of the Income Tax Act. Public Provident Fund is one of the best examples of a government saving scheme that not only helps you to save well for your retirement corpus, but also holds you in good stead when it comes to saving taxes.
When skills meet passion
Post retirement life can be a great time to develop skills for something you have always been passionate about. While the grind of the daily life may not have left room for any hobbies or interests, you can learn those skills now to use them as a source of secondary income post retirement. Freelancing is a great idea for you to stay engaged post retirement and also earn some good money once you have left those office walls for good. Invest in skill development now, and live the retirement goals you have always aspired for!
So, if you are looking at spend your post-work life in the serene environs of Chandigarh in the North or the congenial city of Coimbatore down South, start planning now. Plan and prioritise, and you will be on your way to achieve your retirement dreams.