Retirement planning is one of the most crucial tasks for every individual. Whether you are in any kind of job or you do business, you need to plan for your retirement. We work throughout our youth to enjoy a peaceful and enjoyable retirement. Retirement, where we will have no liabilities hanging over our heads. A time when we will not have to worry about how to pay our bills. Also during that period of our life, most of our financial goals would have been fulfilled.
But to truly enjoy our retirement we must plan retirement as early as we can. This is so as we can end up with ample corpus in our hand. This corps must be enough to sustain our wishes. But what if you find that the money you have will not meet all your needs after retirement.
It may so happen that you have might not be able to start retirement planning early. Early enough to save enough for retirement. So this may mean that you do not have enough corpus to sustain your lifestyle need post your retirement. This will also mean that you must cut down on your expenses by about 40 percent to help yourself, during that period. But cutting all expenses down is a painful job. Especially when you are accustomed to a certain lifestyle for the past 30 to 40 years.
What to do to manage this situation?
1. Sit down to analyze your cash influx
the lifestyle you have built will guide much of your post-retirement expenses. But if your expenses are high right now, then chances are that your post-retirement expenses will be much higher. So, it is recommended that you analyze your cash inflows and make efforts to cut down on your expenses so that you are already suited to a controlled lifestyle much before your retired years. Hence, making changes will not be so painstaking.
2. Rebalance your investment portfolio
rebalance your investment portfolio which may be currently adjusted to your risk appetite. But it may be a good idea to restructure it and get more exposed to equities even if this means more exposure to volatility and risks during this phase of life before retirement. It is necessary for retirement portfolio to be periodically updated so that it remains on course.
3. Consider using employer benefits
EPF is a great tool for saving for retirement. Many make the mistake of withdrawing from it midway or reduce their contributions to this fund. If you find that your retirement corpus is falling short, then consider increasing the contributions to this fund. Also one may opt for voluntary provident fund contributions to maximize your EPF collections. Many hesitate due to the fact this is a debt exposure but when considering the returns it generates it makes sense to bank on this fund to enhance one’s retirement corpus.
4. Delay your retirement planning
if none of the above options seem feasible then it will make sense to delay the plan of your retirement for a few years so that you get the opportunity to grow your wealth. This way your investments will get a longer period for accumulating wealth through your employer benefits such as EPF, gratuity, LTA, and others.
In closing thoughts, the golden years of age can be an arduous phase if you do not accumulate ample wealth for your retirement. This is a time when you will not be able to earn a stable amount and will usually spend more as naturally, your health will deteriorate. So, make sure you plan ahead and prepare accordingly.