Retirement planning is more than just saving money—it’s about investing smartly to ensure financial independence when you stop earning. Many people make avoidable mistakes that can significantly reduce their post-retirement corpus. Here are the 5 most common mistakes NRIs and Indians should avoid:
1. Not Starting Early
It’s never too early to plan for retirement. The earlier you start, the more time your investments have to grow. Experts recommend allocating 15–18% of your annual income in equity and long-term bonds from the early stages of your career.
Tip: Consider retirement policies or pension schemes tailored to your needs to build a solid foundation for a worry-free retirement.
2. Ignoring Other Financial Goals
While retirement is important, don’t overlook other financial goals such as education, weddings, or major family expenses. Failing to plan for these can erode your retirement corpus over time.
Tip: Track all short-term and long-term goals separately and allocate funds for each to avoid overlap.
3. Overlooking the Power of Investments
Simply saving won’t help you grow your retirement corpus. Many avoid investing or rely solely on fixed instruments. Experts suggest a balanced approach:
- Invest in annuities for guaranteed income.
- Park the remaining funds in mutual funds and equity instruments for long-term growth.
Tip: Growth-oriented assets help your corpus outpace inflation and last longer.
4. Not Planning for Critical Illnesses
Healthcare expenses rise with age, and medical emergencies can drain your savings post-retirement.
Tip: Include critical illness plans or cancer care policies in your retirement strategy. These plans often provide premium waivers and guaranteed payouts for a set period, easing financial stress.
5. Retiring Completely from All Work
A sudden stop in work can lead to stress, boredom, and health issues. Staying active is important for both mental and physical health.
Tip: Consider a part-time business or consultancy post-retirement. This not only keeps you engaged but also provides an additional source of income.
Conclusion
A robust retirement plan combines regular savings, smart investments, and healthcare preparedness. Start early, invest wisely, plan for unforeseen medical expenses, and remain engaged post-retirement to enjoy a secure and fulfilling retirement life.
