Why Retirement Planning is Important?
Updated On Jul 24, 2021
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Retirement planning is basically an act of setting income goals post your retirement and pursuing it with all the required actions to bring those goals into fruition. With the right retirement planning, you can spend your post retirement life with ease and without having to compromise on your standard of living. In today's time, witnessing the ever increasing inflation rate, it would be only smart to start with your retirement planning as early as possible.
We are all aware that emergencies can come at your door without knocking and there are chances that you may exhaust all your savings. Therefore, it is significant to invest in a good investment plan in order to continue living your life without depending on anyone else but you.
Importance of Retirement Planning
Taking into consideration the present situation, it is essential to do a convenient retirement planning so that an individual can meet any kind of surpluses, shortfall and emergencies during the retirement days. By doing proper retirement planning, a person can quickly estimate how likely they are to achieve their retirement goals. Additionally, they can also acquire control of the earnings, cash flow and other expenses to gauge the amount of risk they require to take in order to attain their retirement goals.
Let us understand the reasons behind why retirement planning is important:
InflationAs we are aware that the inflation is rising with each passing day, the inflation effect that seems to be small in the short term can actually come across as huge in the long term. It simply means that for buying everything a person is required to pay more such as accommodation, travel, grocery, etc. Therefore, by planning in advance for retirement, an individual can create sufficient funds to secure their future.
Health EmergenciesWith ageing, a person also starts acquiring various health related issues. Therefore, expenses related to health can be a huge dent in the pocket of an individual once they get retired. As per the studies, on an yearly basis India faces medical inflation of 14% to 15%. Also, it can happen that your insurance company does not offer coverage for all the health related expenses. Hence, with a right retirement plan, an individual can gather sufficient funds to deal with any kind of health related emergency after retirement.
Handle UncertaintiesIt is one of the important reasons why doing retirement planning early in life is important. In case, an individual has a good retirement plan handy, then they can face any kind of emergency situation or uncertainties after retirement. Additionally, they can also safeguard the financial future of their family members.
Nuclear FamiliesGone are the days of joint families, and where the senior citizens could depend on receiving monetary support from them. With a rapid change in the culture of Indian homes these days, many couples prefer staying separately and in a nuclear family. Some 30 to 40 years down the lane, there won’t be many people to sustain you financially in your old age. Also, children as they grow up wish to relocate somewhere else due to their jobs. Henceforth, it is important to plan your retirement rather than expecting any financial assistance from your immediate family members.
At the End
Retirement planning is a way of ensuring that you have a regular income source even after your retirement when your monthly salary stops. To hold a retirement plan together a good amount of consideration goes to life insurance. For the majority of individuals, retirement planning correlates with safeguarding the financial future of their loved ones as well as themselves. Although a person starts saving early and makes proper investment, still the fear associated with unfortunate deaths always lingers.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.