If you are nearing retirement but haven’t yet invested in a feasible retirement solution plan and now feel that is too late to start investing, you are wrong. As the old saying goes, where there is a will there is a way, if you are keen on building a retirement corpus to secure your sunset years, you can still do it. Obviously, you will not have those many years in hand to build the corpus which you might have if you started investing at an early stage in your life, but better late than never. Retirement planning and financial planning go hand in hand. One should not overlook retirement planning while making a financial plan. In fact, retirement planning should on top priority in the list of long term goals.
If you are in your 50s and keen building a retirement corpus you can still do so. Here are five retirement planning strategies for those starting late:
- Make sure that you have no debt
If you are starting retirement planning after the age of 50, you need to make sure that you do not have any pending loans or unpaid credit card bills or any kind of debts to pay. Because the last thing you want is for these unpaid bills or loans to eat up your retirement fund. Since you are already starting late, you need to make sure that you make systematic investments in the retirement fund without skipping any SIPs. But, if you are debt ridden you may not be able to divert enough capital towards your retirement corpus.
- Learn to live on a fixed budget
Now when you retire, your main source of income which is your monthly salary will come to a halt. The only money left with you will be your EPF (Employee Provident Fund) and a pension (that too if your employer offers one). You may not be able to afford to carry on with the standard of living that you are used to at this point of time. Because with limited income source, you will have to take care of basic necessities likes’grocery, utility bills, medical expenses, etc. Hence, it is better if you get adapted to living on a fixed budget.
- Invest in a good health plan
It is extremely important for investor to invest in a well-equipped health plan. We all know that with age come illness. And if you do not have a good health insurance policy, you will have to pay from your pocket in case of an exigency. This may hamper the progress of your investments and you do not want that to happen. So it is better to invest in a good health plan.
- Build an emergency fund
The primary purpose of building an emergency fund is to tackle life’s unforeseen financial emergences. Because a financial emergency may not be necessarily health related. You may need urgent money for almost anything and hence, it is better to have some money in an emergency fund so that you do not have to break your retirement related investments.
- Start a mutual fund SIP
A Systematic Investment Plan is an easy and hassle free way to invest in retirement funds. You can start with a small monthly SIP and gradually increase this amount depending on your investment objective. If you do not know how much money you need to exactly invest, you can refer to an online SIP calculator. Also, with SIP you can benefit from the power of compounding as well as rupee cost averaging.
These are some of the retirement planning strategies for those starting late. Investors are however advised to consult their financial advisor before margin an investment decision.
Hemant Kumar is a project manager at Tridindia with more than nine years of commendable experience in writing about LMS, translation, and IT. His unmatched talent and passion for digital marketing gave him the opportunity to work as a multi-tasking project manager at TridIndia’s sister company, Link Building Corp. Today, he contributes to the world by imparting knowledge on SEO, link building and internet marketing etc., that helps business owners grow their online business.