Retirement Planning is very different from our other goals of life in many aspects and it has a large significance in overall financial planning due to the following reasons. For Retirement, the distinctive features are:
- Long accumulation period
- Long distribution period
- Retirement is not optional
- Corpus required is very huge
- Can’t meet retirement expenses via EMI
Therefore, one should start planning for their retirement at an early stage because of:
- Breakdown of the joint family system
- Rising cost due to inflation
- Health-related problems - Rising medical bills
- Increase in life expectancy
- Upgraded lifestyle, luxury & comfort
- Reduction in working years
- Clashing of other financial goals
Now million dollar question is why do we fail in Retirement Planning? Some of the reasons could be...
- Financial Short-sightedness
- Instant Gratification
- Underestimating Inflation effect
- Complicated Corpus calculations
- Investment is the game of consistency, discipline & patience
- Risk in Investments
- Improper Asset Allocation / lack of investment skills
- Inadequate Protection plan
- Behavior Finance
- Procrastination
Understand, neither your parents are your emergency fund nor your children will be your retirement fund. You have to create your own retirement corpus.
How would you like to spend your golden years post-retirement, its absolutely in your hand only!
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