Once you start earning it is important to plan your financial future at early stage of life. For most of the individuals, retirement planning is an old age thing to do. But planning for a secured financial future while you are single and in job is a wise thing to do.
One can start early retirement planning by investing in proper financial instruments. While planning for retirement there are several aspects that should be kept in mind. Further in this article we have briefly discussed top 5 tips for retirement planning.
1. Save for Retirement Now - Many of us rely on social security benefits and the personal savings in retirement. As a salaried individual you may have pension income after retirement but an early life saving always work as a life saver.
2. Be Prepared for Emergencies - Since you have the benefit of only one income and you can fall back on any another income built up for your emergency fund that can cover the expenses of three to six months. Singles’ should choose the coverage of six months so that all the unwanted expenses can be paid off without spending the credit card or retirement saving.
3. Explore various insurance options - In case you have any dependents then life insurance serves as primary option of income replacement for those who depend on you. In case you don’t have any dependents then you can invest your income in different investment instruments where it can multiply and you can receive a good return on your investment at a particular time period. Moreover, having an insurance policy at early stage of life is much easy as the premium rates are relatively less and the policies offers higher coverage as compared to the policy you buy in later stage of life.
4. Diversify your Investments - Retirement planning doesn’t have to be boring. Since, investing only in retirement plans and pension plans may not be enough to support your financial situation after retirement, you consider putting your money in different investment instruments for long term capital appreciation and return. Moreover, various investment plans also provide tax advantage to the individuals.
5. Think About your Retirement Wants - Much before you reach your old age and get retired, start saving money according to your retirement needs. For example, as you age the medical expenses automatically increases so secure yourself and your family with proper health insurance. This will offer you coverage in case of any critical illnesses. Do give a thought on many other factors like which city you want to settle after retirement, major investment that can take place after retirement, etc.
In today’s uncertainty of life,every individual should set two goals;first to be financiallyindependent and second to do Retirement Planning while being in service. However, financial planning depends on one’s own perspective, retirement planning needs much intense preparation and systematic planning while considering the different options available in the market. It is very crucial to check the different aspects while you plan your retirement.
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