HAVE YOU PLANNED YOUR RETIREMENT LIFE?
Last week we read how people fail to plan their Retirement at various Life Stages.
Retirement Planning is nothing but ‘Put your Money @ Work to Earn for your Retirement Days‘.
People always make mistakes in understanding two different concepts Retirement Planning & Retirement Solutions
Retirement Planning is nothing but an accumulation process of Retirement Corpus – This is an Investment Phase just like sowing in a farm.
Retirement Solutions is a combination of two processes. One side disbursements of money as per requirement, other side Growing the corpus to keep pace with inflated disbursements. If anyone fails to manage balance between growth and disbursements he/she might face old-age poverty. This is working just like a Pension Plan or you may call it harvesting.
The Organisation for Economic Co-operation and Development (OECD) has warned of an “excessive” hunt for yield heightening insolvency risks for pension funds
Philosophy of a Retirement Solution
“In a high-volatile bull run, if my plan underperforms, I don’t bother because I might generate a little less returns than others, but in a downfall trend, if I protect a retired person’s money better, I would consider myself a better Retirement Solutions provider,”
While Retirement Planning if you ignore the inflation impact you will definitely face old-age poverty. Inflation is a Silent Killer of your Retirement Corpus.
Retirement Solutions is nothing but ‘Continue your Salary even after Retirement with Increment’.
Don’t fall in prey of Gurranteed Fixed Income
Click on My Retirement Life to check what would be the scenario if Fixed Monthly Income is opted
Retirees must be aware of reducing purchasing power of money because they are living on a fixed amount of money. They must make sure that their investments earn returns equal to or greater than the rate of inflation so that the value of their corpus does not decrease each year.
Retirees must earn constant or increasing Real Income on Retirement Corpus so they can live their lives without compromising their lifestyle.
Real Income = Income – Inflation on Purchasing Power
Remember while Retirement Planning you can be aggressive but after Retirement you cannot take RISK more than certain limits. You should protect your capital.
Few tips on Investment for getting Increasing Retirement Income
- Do not invest money in fixed income – you will face old age poverty because purchasing the power of your money will be reduced day by day.
- Do not opt for Div for your regular income – you will not be getting Div regularly and also varies month on month. So it will be deficult to manage your day to day cash flow.
- Do not use SWP from Equity funds – it will drain more units in the downfall market which cannot be gained in the upper market also means it is an irrecoverable loss. Always use Equity Fund as a Growth Generator only.
- While investing for regular income don’t worry about taxes. Keep your focus on capital safety instead of tax saving. Just to save taxes don’t put your hard earned money on risk (in equity funds).
- Do not try DIY (Do It Yourself) in Direct Plans without consulting any Mutual Fund Distributors or Investment Advisors if you don’t have detail knowledge of Mutual Funds.
Now you would realise that retirement planning is not that easy and could not be ignored any of the above mentioned risks that could be arised by opting wrong options for your Retirement Planning / Solutions.
THEN WHAT TO DO?
“It is not necessary to do extra ordinary things to get extraordinary results”
– Warren Buffet.
Next week we will discuss Perfect Retirement Planning and how it is possible to get a monthly income which will be increasing on a yearly basis.
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