When it comes to financial planning, we make it a priority to invest in various financial instruments to fulfil short-term and long-term goals. These may be buying a house, car, planning a child’s wedding, their education etc. When you’re earning a steady income, these are the things that you mostly plan for. But what about retirement? Retirement is an age when you won’t be earning an income and you must consider retirement planning as an important aspect of your financial goal.
Let us look at why retirement planning is a vital component of sound financial planning.
It allows you to maintain your lifestyle after you retire
You may enjoy a certain quality of lifestyle now thanks to your current income. But you would also want to continue the same when you retire, wouldn’t you? That may not be possible if you retire without having a retirement fund ready. Planning your retirement would make sure that you have enough funds so that you can continue your quality of life even when you do not work.
Retirement planning protects your family
You may have financial dependents like children or your spouse when you retire. Retirement planning makes sure that you can take care of their needs until they become financially independent. You can ensure that both you and your spouse can take care of living expenses and manage sudden expenses.
It enables you to fulfil post-retirement goals
One always envisions certain goals when one retires, like moving to the countryside, or going on a journey to explore the world. To fulfil these goals, you would need the necessary funds. A good retirement plan would enable you to create a retirement corpus that you can use to fulfil all your life goals when you’re at your most relaxed and free from any work stress.
A retirement plan can help you in medical emergencies
The retirement age is also one where there are highest chances of medical emergencies. And to manage medical costs, you would need a source of funds. A solid retirement corpus can be a major source of relief in situations like these. You wouldn’t need to borrow funds or eat into your other savings. A retirement fund can help you pay for medical costs and allow a way for you to avoid sudden financial burden.
It helps you leave a financial legacy
You would always want your loved ones to have financial stability even after you move on. A retirement plan allows you to make your spouse or children the beneficiaries in case you’re not around. Your retirement corpus will be a financial legacy that your loved ones can use for years to come and boost themselves to be financially independent.
All the points mentioned above really drive home the point that retirement planning should be a priority when you’re charting out future financial plan. Right now, when you’re earning a stable income, is the best time to set up a retirement plan, so that you can lead a comfortable life in the post-retirement age.