We have listed out 5 things that you need to do in order to ensure that you stay financially secure during your post-retirement years
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Attaining 60 years of age is a significant milestone and a period of major transition for most individuals. In order to be able to embrace these years of your life without any financial hassles, it is essential that you start planning for your retirement from an early age. Keeping this in mind, we have listed out 5 things that you need to do in order to ensure that you stay financially secure during your post-retirement years.
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Ensure that you have a health insurance cover: If you are employed by an organisation, it is likely that your employer has provided you a group health insurance policy. While this is beneficial for as long as you are in your employer’s service, you will have to remember that this cover will cease to exist the day you retire. Thus, it is necessary that you purchase a comprehensive health insurance policy that offers a lifetime renewability feature, at the earliest. When it comes to health insurance, it is advisable to purchase the policy at an early age since health insurance plans come with waiting periods. Most health insurance plans cover specific illnesses after 2-4 years of continuous policy coverage, while pre-existing diseases are covered after a period of 4-6 years. Thus, make sure to purchase your health insurance plan well before you actually need to avail the benefits of your plan.
Purchase life insurance: A life insurance policy will provide you a risk cover against death, thereby providing financial security to your loved ones regardless of what may happen in the future. Given that, it is advisable to have an active life insurance policy at all ages. Certain life insurance plans also provide the policy buyer a range of other benefits, in addition to the life cover. Thus, you can opt to invest in a retirement-oriented insurance plan, also called annuity or pension plans, which will provide you guaranteed annuity or a steady source of income during the years after your retirement. Alternatively, you can also choose to purchase a term insurance or whole life insurance policy, if it suits your needs better. However, it is necessary that you consider the premium payable for different types of insurance plans, since the premium rates will usually be higher during the later years of your life.
Customise your policy with insurance riders: Riders are offered for all types of insurance products, including health insurance, life insurance, and motor insurance plans. Thus, before you retire, ensure that you have enhanced the coverage of your insurance policy with suitable riders. For example, if you have a health or life insurance plan, you can consider purchasing a critical illness rider that will provide you a cover against a number of critical illnesses that you may be susceptible to, especially during the later years of your life.
Make the right investments: Investments are key to ensuring that you have a sufficient amount of funds available post your retirement. Thus, it is vital that you invest in the right avenues while you are still earning. Regardless of the type of investment option you choose, make sure that it provides you benefits and payouts that suit your requirements. Certain popular investment options include mutual funds, ULIPs or Unit Linked Insurance Plans (which offer both life insurance and investment options), stocks, bonds, real estate, etc. Before making any investment, make sure to consult a financial advisor or financial planner to ensure that your hard-earned money is put in the right places.
Pay off debts and create a budget: One of the most important things that you will need to do before you turn 60 is pay off any existing debts or loans. It is essential that you remember that your disposable income is likely to be much lesser post your retirement. Thus, make sure to create a financial plan by way of which you can repay a good amount of your debt. It is also necessary to create a budget for this upcoming stage of your life. In your budget, make sure to keep a record of the money inflow and outflow. Ensure that you account for all your expenses, be it healthcare-related expenditures, family vacations, increased premium payments for your life, health, and car insurance policies, etc., and balance these expenses against your income, savings, or any investment returns that you may be eligible to receive.
Your retirement is likely to have a significant effect on your life and the lives of your dependents. Thus, make sure to start planning for it from an early age to ensure that you are financially prepared for this stage of your life. Also, make sure to consult a financial advisor at the earliest and work out a retirement plan so you can get your money to work for you when you need it the most.
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