Retirement planning and its jigsaw puzzle
Planning for your retirement is nothing less than a puzzle. There are various aspects of retirement planning that you need to join to complete the puzzle. What are they? Let’s find out.
While we grew up, we all have tried solving the jigsaw puzzle. Here we generally scatter the pieces of the puzzle and one by one try to assemble the pieces to complete the puzzle and make it something like the picture on its box. The way we feel about puzzles, similarly we feel about retirement planning.
Of course, the ideal picture of retirement would indeed look wonderful on the puzzle box, piecing it together would be overwhelming. In this article, we have made three key pieces of your retirement puzzle that you need to put in place to complete your retirement puzzle.
The first piece, having a retirement plan in writing
This is perhaps the most crucial piece is your plan. When you have a plan in writing, this gives a sense of tangibility to your desired retirement and also acts as the blueprint for the way ahead. Therefore, make sure that your retirement planning is not just in your head, but also on paper.
The second piece, know your current lifestyle
We put all our sweat building a life that we had once desired and this is probably defined as the lifestyle that you carry today. There is a huge impact of lifestyle on your finances. In fact, there is also a term known as lifestyle inflation that cuts your wealth harshly.
Hence, it is important to know your current lifestyle and more or less one would definitely like to carry the similar lifestyle their retirement as well. This piece of the puzzle would help you in getting a starting point towards building your retirement plan.
The thirds piece, protect your wealth
One of the most frightful experiences for any retired individual would be if they outlive their retirement corpus. Indeed, such things usually trouble people and end up in sleepless nights. Therefore, it is important to protect your wealth. Risking all your money on volatile assets like equity could end up with nothing but regret. Therefore, the first thing that you need to do is to protect your wealth.
You can do so, by opting for an annuity plan from a life insurance company of the amount that would help you cover your non-avoidable expenses. Doing so, it will make sure that you don’t have to worry about day-to-day expenses. Secondly, the remaining amount should go for a good mix of equity and debt funds. Having said that, asset allocation is quite subjective and depends on an individual and their life circumstances.
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