Planning for retirement is an important activity, yet it is something that gets neglected till one has only a couple years left before retirement. This is why many elderly people are left dependent on their children for care and finances. No matter how much your children love you, it is best to be independent for as long as it might be possible. This gives you privacy, independence and self respect. You probably know these things already, but have you started planning for your retiremnet yet?
Factors to Consider When Planning for Your Retirement
1. Living Expenses - This is the most important factor to consider. How will you meet your living expenses without a steady income from job? Chart out expected expenses and income during retirement. Factor in inflation and compare. If you start doing this in your 20s or 30s, it will guide you about how much you need to save every month for a relaxed and worry free retirement.
2. Where do you want to retire? It is not compulsory that you continue to live in your current home even after you retire. If you live in a big city like Delhi or Mumbai, you probably live in a very expensive home with a high ost of living. Imagine how much money you could put aside if you sold this home at retirement and moved to a smaller town. Living in a smaller town has many benefits - housing is less expensive, cost of living is low and it is safer coz crime rate is lower.
3. Should you move to a home for the elderly? Our society sometimes looks down upon old age homes. But there is no shame in living in a home for the elderly. It does not mean that your children do not love you or do not wish to take care of you. It just means that you can enjoy privacy and independence along with company of like minded people. You get better care 24/7 in a home for the elderly and there are many activities etc to keep you engaged. If the idea sounds good, consider elling your home and moving into an old age home!
4. Income Sources - Some people are lucky and have a pension from the government after retirement. But if you are not one of such people, you have to think about income sources in retirement. Will income from savings and investments be enough? It is a great idea to start cultivating alterative sources of income while you are still young. You could start a side business or create a rental property so that you have an inflow of cash during your retirement.
Now that you have read about preparing for challenges of retirement, get started and begin planning!