Importance of Retirement Planning – When an individual’s active working life comes to an end, that ending is known as retirement. Depending on conditions, a person can retire when old or eligible for private and public pension benefits.
One of the most common ways people save money is opening up a Fixed Deposit (FD) account. Another ways to save money is by investing in property, stocks, or gold and holding onto it till your retirement.
However, everything depends on the market, and prices can fluctuate accordingly. Therefore, it is crucial to have a retirement plan before you retire.
Importance of Retirement Planning – The Reasons
1. Planned Retirement, Less Stress in Future
Many health problems in our daily life happen because of stress. A decent majority of adults go through the stress of saving money and managing their expenses.
With a retirement plan, a person can protect themselves from any unnecessary stress and health problems.
2. Monetary Independence Even After Retirement
Every person wishes to be independent throughout their life. When you are old, you need the support of your kids and require them to take care of you.
However, with a planned retirement, a person will have enough money secured to take care of their expenses.
3. Emergency Ready
Medical emergencies come unannounced, and you have to be prepared to bear any expenses that come your way.
From a routine check-up to excruciating surgery, everything requires money. Often your pension is not enough to take care of your house expenses along with the unforeseen medical expenses.
Hence, it is essential to plan your retirement with beneficial plans. These plans help you in saving money for the events mentioned above.
4. Work Goes, The Money Stays
A proper retirement plan will allow you to manage your money correctly, and you won’t run out of money. The plan will enable you to understand how much risk you can take on your investments.
It also helps in calculating the correct rate of return that you should receive on your assets.
A financial advisor or a firm specializing in these services can help you manage your money and investment portfolio. It would help you save the right amount of money you need before you retire or quit working.
5. No Social Retirement Benefits
In many countries, especially India, there are no retirement benefits schemes for elderly citizens. There are government jobs and some companies that offer pension and provident funds, but they are insufficient for expenses.
It is crucial to create awareness regarding investments and retirement plans. The elderly citizens and working generation should be made aware of mutual fund investments and other programs.