Things to remember while planning your retirement
Retirement planning is one such crucial aspect of financial planning, which should never be ignored. In fact, one should start planning for retirement right when they get their first job. However, it does not mean that if someone is in 40’s then he or she is late. As it is rightly said, it is never too late to begin. So, if you have not till now, you should start your retirement planning from today itself. And, in that case, you need to remember a few things that are mentioned below:
Capital protection
The first thing that you need to keep in mind while planning for your retirement is capital protection. Many a time, people are left will low to no income at the time of their retirement. Hence, the overall asset, which you will have at that time, will require to be used in a way that you get regular income along with capital appreciation. However, the priority needs to be given to capital protection, which will act as insurance for you.
Annuities
Many experts believe that mutual funds are much better an option than any of the annuity plans available in the market. Considering returns, their judgment is somewhat correct as, generally, annuities do not provide as good returns as mutual funds. Apart from this, annuities are taxable as well. However, having an annuity ensures that you continue to get a specified income for a longer period. Since no one can predict how much will live, it is safer to have some part of your capital to be invested in annuities in order to receive a guaranteed regular income. The other part can be invested to beat inflation in the long run.
Start early
In the personal finance space, time is the king and not the returns. To get the benefit from the power of compounding, you need to focus more on time rather than returns. Having said that, it is always wise to start planning for the retirement as early as possible. The early you start the more you can accumulate for your retirement. As retirement is going to be a significant phase of your life, start as early as possible to live this phase the way you want.