1. Not Starting Early
The earlier you start, the more time your investments have to grow. Aim to allocate 15–18% of your income in equities and long-term instruments.
2. Ignoring Other Financial Goals
Don’t let other goals like education, weddings, or travel eat into your retirement corpus. Plan separately for each goal.
3. Overlooking Investments
Simply saving is not enough. Combine annuities for guaranteed income and mutual funds/equities for growth.
4. Not Planning for Critical Illnesses
Healthcare expenses can drain savings. Include critical illness and cancer care plans for peace of mind.
5. Retiring Completely from All Work
A sudden stop in work can lead to stress and boredom. Stay active via part-time work or consultancy.
6. Underestimating Inflation
Ignoring inflation reduces the value of your savings. Factor in 6–7% annual inflation when calculating retirement corpus.
7. Relying Solely on Employer Benefits
Don’t depend entirely on EPF, NPS, or pension schemes. Build a personal retirement corpus for extra security.
8. Withdrawing Retirement Savings Early
Avoid dipping into your retirement funds for short-term needs. Staying invested maximizes compounding benefits.
9. Not Diversifying Investments
Putting all funds in a single instrument increases risk. Use a mix of equity, debt, annuity, and mutual funds.
10. Ignoring Tax Benefits
Retirement savings have tax advantages under Sections 80C and 80CCC. Optimize investments to save on taxes.
Conclusion
A robust retirement plan avoids these 10 mistakes by starting early, investing wisely, planning for health, and staying disciplined. Follow these rules to secure a stress-free and financially independent retirement.
