NEW DELHI: Everyone plans for their retirement early these days. Most of the people think that saving regularly would be enough for retirement. But the fact is, if you don’t plan your retirement wisely, you would end up with a smaller nest egg than you expect. Whereas, a right retirement plan can provide you with steady income even after retirement.
While planning your retirement fund, remember the points given below to avoid some common mistakes.
Don’t take any hasty move
Financial experts suggest not to take any hasty move about investment. They recommend keeping the retirement investments in equity-backed investments if you are investing for long-term. So that, market volatility won't affect your investment.
Studies show that If you hold an equity fund for a year, the chances of loss is high. In other words, longer the holding period lesser the loss. If your holding period is more than 10 years, the probability of loss is almost nil.
Beware of the risk in insurance
Most of the investors choose endowment policies to save for retirement. But, financial advisors suggest that endowment policies are not really helpful, as the returns are less than 6%, even for a long-term plan.
Financial experts advise estimating correctly how much money you will need in your retirement kitty. They say as the income grows, the expenditure will be more. So, experts strongly recommend that nest egg should be reviewed at regular intervals.
Don’t put all eggs in one basket
The major expense in retirement is healthcare. So that, experts suggest mixing your retirement tool kit with various products. Instead of putting all your savings in one investment, you can consider government schemes of SCSS and PMVVY for the investment. They offer relatively high assured annual returns of 8.7% and 8%.
Nowadays, there are many investment and financial planning apps available in the market which would also help you to plan for retirements. For example, financial planning app like ETMONEY has services such as check your monthly expenditure, top mutual funds, loans, compare insurance plans etc. Knowing your current expenditure and planning accordingly for retirement is one of the key parts of retirement planning. So, start your retirement planning today.