I am not even 26, then why am i talking of retirement? Isn't it too soon? The answer from many of you might be yes, but it pays to start early. It creates a discipline to save for Retirement and also saves you from unnecessary worries at the end of your work life. Retirement is not the end of your life, infact it can be the beginning of the best time of your life. It means you dont have to drag yourself to office everyday, and can do what you fancy. But all this costs a lot, so start planning early. Here's a list of things you should take into account while planning for retirement.
1) Longevity : Life expectancy has increased over last decade and continues to increase, so you need to ensure that your assets do not outlive your age. Also inflation will add to your woes. Calculate your retirement amount very carefully. Use retirement calculators available online.
2) Healthcare: Medical costs are rising faster than rate of inflation and is the biggest source of expenditure after retirement. Its better to opt for a health insurance in early stages of life. This will save your premium and also reduce the chances of your policy application being rejected due to any medical conditions.
3) Taxes: With the New Direct Code supposed to come into action soon, your retirement savings are gonna be taxed too. Keep this into account when you plan for retirement.
4) Market Volatility: For earning better returns most of us rely on stock markets, but don't forget that the markets are volatile. So don't get tempted in taking unnecessary risks, and keep your plan as volatility proof as possible.
The article has been sourced from Money Today, October edition
