Retirement is a phase of life when you want to relax and lead an independent life ahead. You save money all your life for this phase and now here you are; retired with a corpus in hand. What next? You wouldn’t want to spend all your money, neither would you want to compromise on your lifestyle.
Retirement entails a change in earning, spending and saving habits. So, before you jump into the post-retirement investment bandwagon, read the following 5 things you should do:
Prepare for risks
There are a couple of factors that can pose a risk to your retirement corpus. Being aware of these risks can help you utilise the corpus judiciously.
We don’t know for how long we will live. If you live longer than you expected to and don’t use your corpus judiciously, then you may find yourself in financial soup.
Old age also brings with it some health problems. Predicting good health is impossible and when health demands attention, it can wash away a big part of the corpus.
Calculate Regular Expenses
To be able to meet the basic expenses with ease, calculating your regular expenses is important. You also need to factor in the vacations or hobby classes you desired to pursue post retirement. In case your children are still young, then expenses incurred on them before they become financially independent should also be calculated. This will give you a bird’s eye view of your monthly costs; an essential step before you invest the corpus.
Once you have calculated your monthly costs, start looking at investment avenues to start earning regular income. Divide the corpus into three parts:
- Regular Expenses
With the help of a Financial Advisor, invest keeping all these three aspects covered. Steer clear of make-money-quick schemes to avoid potential losses.
Avoid unnecessary expenses
Post-retirement, the income generated from investing the retirement corpus is one of the source of funds. Avoiding big expenses, like buying a lavish car or going on an unplanned vacation will help avoid burning holes in the retirement corpus.
Keep track of your accounts
You can get all the accounts linked to a single savings bank account and get all the monthly dividends/interest credited to this account. It can help you keep track of your money easily without having to worry about ‘n’ different accounts.
Many Mutual Fund Houses offer Systematic Withdrawal Plans (SWPs) available which let you withdraw a fixed amount at regular intervals. This can help fight the urge to splurge while ensuring a regular flow of money. The retirement corpus, if planned well can work wonders in helping you live a financially independent life. Follow these guidelines and enjoy the golden years.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.