Retired without a financial plan? Find out what you can do now!

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Whole life insurance pen and dollar banknotes.

If you’re closer to retirement, you may have realized that life is not going to end the day you retire,especially when it comes to your finances. Surveys carried out by reputed entities suggest that very few Indians indulge in retirement planning by considering the days when they would be old and needing financial security. Similarly, very few individuals actually start saving early for their old age.

A retirement with no planning

Being financially unprepared for retirement can be painful. Imagine that someone retires after a well-built career, with a certain level of corpus and assets in their portfolio. On retirement, they immediately stash their money into fixed income instruments and maybe also purchase real estate.

While at the beginning they might not feel any financial pinch, as the months pass, they will start feeling the effects of inflation and the lack of a steady source of income. They will come to the realisation that theirfinancial situation could have been so much better if they had rigorously invested for retirement in their younger days, such as in wealth creation plans or pension plans. Although one cannot turn back time and build a retirement fund, they can definitely secure their financial future to an extent by acting as soon as possible.

It’s never too late

If you’re in a situation such as the one described above, you simply need to adopt the following axiom in your life – Better late than never. You can redraft your financial strategy and channel a chunk of that lumpsum amount into mutual funds. By consulting a financial advisor,you can understand how simply investing in risk-free fixed income instruments can be synonymous to not investing at all for retirement.

You can opt for something like hybrid mutual funds,which will re-balance equity exposure on the basis of market valuation and reduce risk. Since these schemes use arbitrage to manage equity exposure, the taxation will be the same as equity funds. A retirement calculator could help you understand what to expect from your decisions.

Plan your retirement today

You must plan for your retirement as early as possible –

  • Start saving and investing right now 

Your savings and investment should correspond to your income and should increase and decrease accordingly if you receive or lose more money. If you are not confident aboutinvesting all by yourself, take the help of a retirement calculator or even professional financial planners.

  • Pay off debts quickly 

Avoid going for instruments such as personal loans or credit cardsafter retirement.

  • Invest in different assets

Try out real estate, gold, equity, and debt-based financial instruments. You can then hope for optimum returns and protection from risks.

  • Regularly review your investment portfolio

Ensure that your portfolio remains stable and strong. As you complete different milestones in life or become older, tweak the portfolio accordingly to suit your current phase of life.

  • Be careful of commitments

It is not uncommon to think that you will take care of the educational expenses of your children or your relatives’ children. But do keep in mind that education is expensive. Instead of blindly committing, keep a target amount aside for such commitments and make sure you have money to take care of your retirement and other needs.

  • Stay prepared for emergencies

Keep aside an emergency fund to tackle unexpected circumstances. Purchase medical insurance, so that if you fall ill or need to be hospitalized, your finances do not get heavily affected.

Be prepared for your financial future to maintain your lifestyle and take care of emergencies. The retirement years are called the golden years, for which you will have to be prepared financially so that you enjoy this golden phase by spending time on things that you like and that can take away your stress. A pension plan will equip you with a complete understanding of your financial goals and help you attain them. Contact an insurer for more information on insurance policies that can help you plan your retirement.