How to Ensure Financial Fitness for the Time of Retirement?
As life gets healthier and longer, one needs a constant flow of money to lead it comfortably, especially at the age of retirement. Thus, the earlier you start planning your retirement, the better it is.
The first step towards retirement assessment is to estimate how your current plans will differ from the ones after retirement. For those who incorporate the habit of early financial planning in their present regimen will find the process much easier than those who have never analyzed their spending habits. But as it is said, it’s never too late to get started, let’s start a journey towards financial fitness right from today. Further, we even believe that with any plan, it is best to be a little conservative too and account for various contingencies, be it illness, urgent expenses, etc., as often the things don’t work out as planned.
So, let’s find out how to ensure financial fitness and also learn about mutual funds in which you can invest for a happy life after retirement.
Know Your Needs
When you plan your finances for long-term commitments such as retirement, you need to understand that it would be a long ride. Thus, before starting out, it’s crucial to ask yourself a few questions.
- How many years are left for you to plan for retirement?
- How much money will you require at the time of retirement?
- What’s your risk appetite?
- What’s the monthly income you’d need to carry your current lifestyle?
Planning becomes a cakewalk, once you answer these questions. Also, you will be happy to know that no matter what your investment horizon, risk-taking ability, or investment amount are, there are mutual fund products for every need.
One can invest in equity funds for capital appreciation, debt funds for generating a source of regular income, or gold funds for securing one’s future. If you are a conservative investor, choose liquid funds which are safe, or else if you prefer high risk, you can opt for sectoral funds. Further, there are hybrid funds which invest in both equity and debt instruments and are for those who prefer moderate risk.
Today Is the Right Time
Enough of procrastination for now! Don’t worry if the market is volatile because you can invest through SIP which helps you to seek benefit even when the market is facing a downturn. Further, as retirement is the last goal for you to accomplish, you have enough time to let your money grow.
Equity funds are ideal during accumulation period as equities tend to outperform most assets over long periods. A simple way to start out is by investing in equity funds via SIP. It irons out unpredictable market movements by accumulating more units when the market falls. You can move towards debt as you reach closer to your retirement age, say you are left with around five years. Now invest around 20% of corpus each year in debt instruments. You can even seek benefit from Systematic Transfer Plan. The idea here is to reduce risk and build the debt portfolio which gives consistent income after retirement with little or no loss of capital.
Best Retirements Funds to Invest in
Apart from Yoga, early financial planning also ensures that you lead a much healthy and comfortable life in the years ahead. And, to make that possible for yourself, you must invest in the best of instruments available. Considering the latest trend, mutual fund investments have been highly successful in creating long-term wealth. So, on the special eve of International Yoga Day today, don’t just stretch your body for a better physique, stretch your investments for a better and happy retirement.
To seek any guidance in this regards, connect with the experts at MySIPonline.