Retirement was so simple for the Baby Boomers and GenX. Gone are the days where a quantifiable, largely-risk-free pension was offered against a career-long reciprocal loyalty between employer and the employee. But today, it is widely recognized that the attitude of the millennials towards pensions and savings is different from that of the previous generations. They value experiences and spending over savings.
A recent Deloitte survey revealed that millennials leave their jobs within two years of joining due to a lack of loyalty to their employers. With non-linear career paths, characterized by working on multiple jobs or frequent job changes, the creation of a single large pension corpus is nearly impossible. However, prudent financial planning can help create a big corpus of pension. Here are a few quick tips to help you arrange for a comfortable life in the post-retirement phase.
Early Bird Planning
Early retirement planning is essential as it takes a huge amount of time to build a good amount of financial backup. Think and collect investment ideas that can help you reach your financial goal of retirement. Today, there are many investment plans available in the market. Compare the plans and select the one that suits best according to your requirements and start investing in it. A review of your investment plan once in every 3 years is also recommended. This would give you a fair idea about your returns or alternative investment options that can potentially multiply your savings quickly. Saving is key to investing and if you fail to invest, you won’t be able to accumulate the amount of money you’re expecting by the time you retire.
Follow The Plan Religiously
It’s never too late to start saving and the best way to do so is to invest in different investment plans. Take pit stops regularly and check them periodically if the instruments that you’ve chosen are performing as per plan or it needs a retweak. So while the process of investing should never stop, it is necessary to keep checking and realigning as per market situations. For that, you’ll need to stick to the devised investment plan and execute it properly until your financial goal is achieved. Ensure that you do not divert your retirement savings or stop saving abruptly.
Choose Automated Savings
The automated investing route is a time tested way to help achieve your retirement goals. Instead of investing a lump-sum amount periodically, invest in systematic investment plans (SIPs) that allow you to pay small amounts on a monthly basis through Electronic Clearing Service (ECS). Mutual Funds are the best investment tools wherein a number of entities/people (investors) share a common financial goal. Purchasing mutual funds online enables you to choose the ECS payment option, and it is also recommended to invest in mutual funds from trusted online platforms like Finserv MARKETS. At Finserv MARKETS, you can open a free mutual fund account with no brokerage involved, and invest in top-rated mutual funds that suit your investment goals with zero commission. With a mutual fund account, you can opt for systematic investment plans (SIPs) of top-rated mutual funds offered by players like DSP, Aditya Birla, HDFC, L&T, and many more. You’ll also have access to your detailed portfolio summaries and insights. Going with the ECS option will deduct your amount automatically on a pre-decided date every month. This process can go on for a fixed number of months or can continue till the time the investor wants to stop it.
Be Debt Free
It is important to get rid of any debts as you reach your retirement. In a world where social media fuels consumption, it is essential that you periodically review your expenses to ensure that a large amount of money is not going towards meaningless expenses. Keep your expenses in check by defining the right budget. Maintaining a budget is the best way to keep a general track of where your money is going, and cutting back when it exceeds pre-determined limits.
Bracing Up For The Challenges!
It is quite predictable that, by the time the millennial generation reaches their retirement age, health would become the prime concern and robots may look after the elderly. Despite this, enjoying life post-retirement requires careful planning long before you reach at the stage. You need to understand that one day you’ll stop drawing your monthly salary, and with no chance of a pension at all, the highest priority is to just start building the post-retirement corpus. Once started, continuously feed the pot until it becomes sufficient enough to enjoy your retirement. It is therefore critical for millennials to think about the financial priorities and start saving immediately. Right financial knowledge is the central to achieve this.
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