How to create a retirement plan that fits your lifestyle

Retirement can be both exciting and intimidating – depending on how prepared you are for the golden years in your life.

Creating a retirement plan that fits your lifestyle is an outcome of a financial commitment over the years, which can be very rewarding if done rightly.

It is extremely important to take charge of your financial future right now, and not defer it for later years. Only then you can create a retirement plan that transforms the last leg of your living years into the most fruitful chapter of your life.

If you are wondering how to plan for retirement effectively, here are some simple retirement planning tips that you can follow to kick-start this journey.

Retirement planning tips

The retirement planning may differ based on the financial goals, lifestyle and income levels of an individual. However, it needs a disciplined approach and long-term savings to create a retirement corpus fund or pension.

Knowing when do you want to retire

One of the major factors that would help you assess the amount of money you would need for your retirement years is the timing of your retirement. Early retirement would need a much bigger corpus to pay for vacations, entertainment, shopping etc. over the years besides the usual day-to-day expenses and medical bills.

On the contrary, if you plan to continue to work till the later years of your life, you can work towards making provisions for unforeseen circumstances and emergencies, instead of trying to build a huge corpus.

Lifestyle-based retirement planning

It is important to envision the lifestyle you are aiming for after your retirement. Whether you just want to maintain your standard of living, or you are aiming for an upgrade (like getting a driver) to stay more comfortable during the tough years, can be some of the lifestyle factors affecting retirement planning.

Calculate the kind of expenses you might incur annually during those years after taking the inflation rate into account, and invest accordingly to boost your savings.

Budgeting

Among the most important retirement planning tools and resources is budgeting. After you have made an estimate on the kind of money you would need for your retirement, it is important to create a budget that would help you manage your current expenses and set aside an amount for savings.

You must make sure that you are setting aside enough monthly savings and parking them in the correct investment vehicles premised on your retirement goals. It is also equally important to stick to these plans and stay consistent to get desired results.

Start early

Personalised retirement planning can be the easiest while yielding the best results when you start early. As soon as you start working, start investing for your retirement through the various available pension schemes. When you invest in a retirement savings plan, it not just adds to your pension kitty but also lowers your taxes. On top of it, the magic of compounding would turn your small insignificant monthly contribution into a fat healthy retirement kitty in a way you couldn’t have imagined. So, start saving early even if you are unsure of your exact retirement goals.

Diversify

When picking investment vehicles for your retirement planning, it is prudent to put your savings in different types of assets like stocks, metals, money market instruments or even real estate. This will reduce risk, while also improving returns in the longer period of time.

Buy adequate health insurance

Buying health insurance is like oxygen for retirement planning. As soon as you cross a certain age, health issues start knocking at the door. At such times, when there is no steady flow of income, any retirement planning without adequate healthcare cover can fail miserably. Therefore, include a comprehensive healthcare policy with wide coverage in your retirement plan. Also, it is important that you buy a plan early in life with the option of lifelong renewability as premium would be much less when you buy it young.

To conclude, it can be said that an effective retirement plan can only be devised after you have considered your current financial landscape as well as your future aspirations. Start early, select the right investment vehicles and stay committed to enjoy a secure and enjoyable retirement.