Expenses that can sabotage your retirement corpus
We suppose our retirement period to be free from stress and anxiety where we finally get to relax and spend time however we wish to spend it. But if you underestimate the expenses in retirement period then it surely can burn your retirement corpus which you may have built throughout your pre-retirement or accumulation phase. Though everyday living expenses may get a bit of expensive in retirement, but there are a few others that have a capacity to wipe out your retirement corpus in no time. If they are left unchecked, then these expenses may sabotage your retirement corpus.
Healthcare
This is one of the major costs that you may face during the retirement. During retirement even the health insurance gets expensive. So, it is prudent to have health insurance as early as possible to save costs on premiums on health insurance in retirement phase. However, the healthcare cost does have a capacity to burn your retirement corpus. This may further disturb your overall cashflows in retirement. To avoid this it is better to have a healthcare corpus as a financial goal or consider the same while calculating the retirement corpus.
Financial goals
It is not that if you are in a retirement phase you won’t be having financial goals. This is the reason to get your retirement planning done. While planning for your retirement you may probably have certain goals which you need to consider while in accumulation phase to ensure smooth cashflows throughout the retirement phase. Here you may separately plan for the same or you may include them in the calculation of retirement corpus.
Luxury needs
At the start of retirement phase people usually receive lumpsum amount which is a huge chunk of money that own needs to manage in a way to easily sail through the entire retirement period. However, there are certain luxury needs that you may have in retirement such as having a farmhouse or owning that expensive car, etc. This may also burn your retirement corpus. So, to avoid this you may either plan early during your pre-retirement period or include them in the calculation of retirement corpus.