Retirement is called the golden period of your life because you are free from major financial responsibilities, do not have to take the daily stress of work and you can relax and enjoy. However, since retirement means an absence of workload, there is no regular income. As you retire, your monthly salary or income stops but your lifestyle expenses don’t. That is why it becomes necessary to arrange for funds after you retire so that all your expenses post retirement are easily met.
Here are some steps to take so that you can prepare for your upcoming retirement –
- Clear away your debts
The first thing which you should do is to pay off all your loans and liabilities. Continuing loans into your older age are not advised as your income would stop and paying EMIs would become difficult. So, try and clear off your debts before you retire so that your money would be freed and you can use it to live out your dreams after retirement.
- Create a realistic budget
The next step to take is to make a budget for your expected expenses after you retire. When you know the expenses which would be incurred, you can plan to arrange for funds to meet such expenses. So, keep in mind the current expenses, take into account inflation and then plan a realistic budget of your monthly expenses post-retirement.
- Create a regular income from your investments
You must have created a retirement corpus or have invested in various assets to create wealth. As you approach retirement, it is time for you to utilize your investments to pay for your retirement. Look for systematic withdrawals from your investments in the form of monthly incomes. As you generate a source of monthly incomes from your investments, you would have a steady flow of funds which can be used for meeting your lifestyle expenses.
- Invest in fixed deposits
Fixed deposit schemes give you guaranteed returns over a fixed period of time. As your retirement age is approaching, you cannot take risks by investing your retirement corpus in market-linked investments. You should, therefore, invest a part of your corpus in a fixed deposit scheme to create secured returns. You can choose flexible deposit schemes which give you higher interest rates and also allow withdrawal flexibilities as and when required.
- Have a health insurance plan in place
Old age comes with a host of diseases and medical illnesses each of which requires substantial funds for treatment. Given the rising medical costs, having a health insurance plan is a must. Invest in a health plan as early as possible to get wider coverage at lower premiums. Continue to renew the plan year on year to enjoy coverage even after retirement since health plans do not have a cover ceasing age.
- Create a will
Lastly, create a will of your property which would help in property division after your death and ensure that your loved ones get what you want to give.
So, prepare for your upcoming retirement using the above-mentioned steps for a comfortable retired life.
Related Article: Small Risk factors of FD that you should know