Retirement planning is perhaps the most significant leg of financial planning. People work their entire life so that they can ensure a secure and stable retirement for themselves, one where they need not be financially dependent on anyone. As important as planning for retirement is, a lot of people, including women, tend to delay or ignore the same. Data from the 2017 Global Financial Literacy Excellence Center study on gender gap in financial literacy showed that only 20% of women understood financial concepts. The lack of knowledge in the domain and little to no motivation from home and friends further limit the number of women who invest towards their life after retirement. However, with a little bit of planning and financial discipline, you can attain financial independence to live the life you want to during your sunset/retirement years. Here are some retirement planning tips that you can try:
1. Start early
From the day you start earning, it is advisable to invest for your retirement by setting aside some amount towards various retirement investment tools. Starting early is favourable for a lot of reasons – it gives you the flexibility to endure risks by investing in high-risk, high-reward retirement tools that speed up the process of wealth creation. Another reason is understandably that, the earlier you start the more you would be able to accumulate, the better are your chances of reaching your financial goals for retirement.
2. Understand finance
Once you start getting familiar with the world of finance, you can cash in on many opportunities. It is important for you to identify the retirement strategy that will give you maximum benefits, basis your goals and risk-appetite. Start talking to colleagues and friends to understand the different investment strategies they follow.
3. Have a long-term plan
Financial planning is an ongoing process that continues well beyond retirement. It is not limited to depositing a certain sum of money into an account each year. It is equally essential to regularly review those funds, reinvest returns, and invest in stable assets such as insurance, fixed deposits, bonds, etc. Having a long-term plan ensures that all changing life events, aspirations, and goals are incorporated into the retirement strategy. This will enable you to use your money such that you do not run out of savings during your lifetime.
4. Make smart investments
In order to grow your money, you must invest money in the right instruments. Insurance is one such important financial tool. Unit-inked investment plans, endowment plans, and life annuity plans offer benefits of insurance as well as investing. These are an ideal option as they offer wealth creation, while also keeping loved ones protected. Thus, guaranteeing a safer tomorrow. You can also consider mutual funds, stocks, etc., as they help in earning returns over the years.
Why do women need to save more?
There are a number of reasons why you need to start saving more. Firstly, saving money will allow you to fulfil your individual dreams. Whether it is a vacation with your spouse or friends, or planning the wedding of your children, with sufficient savings, you can achieve your goals while ensuring the financial safety of your loved ones as well.
Secondly, women tend to live longer than men. Studies show that women have a life expectancy rate of 70.3 years at birth, compared to 67.4 years for men1. With more years of life, women also need enough funds to cover their expenses. Moreover, old age can come with its share of problems such as health issues and the need for support. All of these things require additional money.
To sum it up
Retirement planning is the need of the hour. It is a fool-proof strategy for you to live the life you always wanted to, post retirement. With a sound financial status, you can also help your loved ones in achieving their goals and aspirations. So don’t wait any further, start planning, saving, and investing for your future now.