Planning your finances properly is imperative before you plan out your retirement. It has been rightly said that “How well you retire depends on how well you plan today!” Retirement brings enough time for a person white at the same time there is a sharp decrease in his income level! And with passing days when inflation is moving northwards, it is but a foolish decision not to plan your retirement!
So how do you plan your retirement?
Eliminate Your Debts
There is nothing great about taking debts as you end up paying more in terms of interest .Taking a loan and repaying it when one has secure source of income is one thing and repaying it after you retire is another! Carrying the burden of a loan to one’s retired life will put you in more and more trouble as your earning capacity decreases after retirement! It’s thus important that you should properly choose the term of your loans and eliminate it before you retire!
Assess Your Future health-care costs
Medical costs are a major deterrent in the finances of older people. As you grow old, your medical bills will go up while the number of insurance companies that will be willing to cover you will go down! So it’s critical to pay special attention to this expense. It is an important part of planning for long-term care and deciding how you’ll pay for it. . At old age the medical expenses are inevitable. If you have not planned it properly the all your retirement plan will become a mess.
Establish a Retirement Budget
General Expenses of everybody remain static. Irrespective of your income level, some expenses like transportation, rent, telephone bills will always remain static. Again for most people who take up to certain hobby after retirement, there is additional cost involved. It is thus important that you establish a retirement budget when you are in your prime of earning potential.
Your retirement corpus and retirement income need to be tax efficient. You need to pay taxes as and when the fixed deposits matures irrespective of that you withdraw interest or reinvest under a cumulative option. But you need to pay interest only when you withdraw from the mutual funds. Careful selection of investment vehicle can reduce your tax during the retired life.
Oversee estate planning
Estate planning is an important part of planning for your financial future. But this is the aspect of the planning process that cater mostly to your beneficiaries. The aim of estate planning is to make sure that an individual’s estate is passed on to the chosen beneficiaries of the estate owner. In essence, estate planning involves planning today what would eventually become of one’s assets, properties, lands, wealth etc. even after the passing away of the owner.No matter what a person’s net worth is, it is always important to have a basic estate plan prepared. Such a plan would help ensure that your family or chosen beneficiaries may have their financial goals met even after you die.