How easy or difficult is it to call it quits
someday and lead a life of peace and harmony in the comfort of your home?
Retirement is probably one of those welcome decisions for individuals who have
worked for a major part of their lives to earn a living.
But many also fear the financial repercussions of such a decision – would they
have enough money on them to sustain themselves after they retire from their
full-time jobs? Is it a financially sound move to retire and never work again?
Fret not, as financial experts and share market
brokers have reasons to believe that some smart retirement planning
strategies carried out at an early age can significantly help individuals
seamlessly transition into their retirement phase. Take a look at some of these
in Schemes that Will Provide Fixed Income After Retirement.
During the initial phases of retirement, it
is natural to continue to long for a regular source of income to help one to
carry out his/her mundane expenditures like before. Fixed income in the form of
regular investment returns can help you adjust to retirement more seamlessly,
with a secure alternative inflow of money. For this purpose, you may opt for
retirement-oriented pension schemes like the National Pension System, or a
government or corporate bond investment.
a Carefully Detailed Retirement Plan.
Finance experts and planners
recommend that individuals not only plan their retirement thoroughly but also
document their plan so that they know exactly what direction they are headed
in. The thumb rule while preparing such detailed investment plans
is that the more tangible your objectives and goals, the more clarity you have
on how these goals are to be achieved. For instance, instead of merely stating
that you expect a financially secure life after retirement, it is better to
specify what exactly you mean by ‘financially secure’, such as “x amount of
returns per year after retirement”. Based on your goals, you may further
evaluate what securities you should invest in and your risk tolerance levels.
Opting for Specific Retirement-Oriented Investment Plans.
Many people also follow very specific
retirement-based strategies such as the time segmentation strategy. These
strategies have been followed by investors for their systematic approaches to
how the returns are to be received in the future.
For instance, in the time segmentation method, an investor invests in 3
types of avenues – one that is least risky and relatively short-term (such as
government bonds) and provides a regular inflow of cash to the investor
immediately after retirement; a second one that is comparatively more elaborate
(such as convertible debentures or mutual funds
investment) and moderately risky but provides higher returns as compared to
the earlier one; and a third type that entails a much higher risk level (such
as stock-linked MFs or individual stocks) but promises the highest returns.
Investing in such time-bound retirement schemes helps ensure that as one’s
monetary requirements change in phases after one’s retirement, the investment
returns one reaps also commensurate with such changes.
Plan Your Investment Portfolio and Asset Allocation.
As a retiree, you may have different
financial requirements and goals to meet. For instance, you would want to
allocate some of your investment corpus towards emergency funds, while some may
be directed towards receiving regular income through annuities. Planning your
asset allocation well in advance ensures that you have specific amounts
allocated to different financial requirements. While preparing your portfolio,
make sure to bifurcate your aggregate investment amounts into systematic chunks
and classify which ones you would want to allocate for what financial needs.
Planning for retirement is a gradual albeit
very rewarding process. The key here is to identify your long-term needs and
objectives, prepare an in-depth investment plan and create your investment portfolio
keeping in mind your finalized goals. Looking for some help as you go about
planning for your retirement? Let us help you out with your finances! Click here to know more about our services.