Everyone waits for retirement so that the daily grind of a 9 to 5 job ultimately comes to an end. The drawback to retirement, however, is the bitter truth that your income will come to a stop. If you wish to continue living the same standard of living even during retirement you would require a substantial corpus. Having insufficient funds could mean compromises and reducing expenses.
So now the challenge is how to make your retirement corpus last a lifetime? Below are some tips;
Start investing early
Retirement may seem far off when you are in your 20s. But you must understand that in order to build a large corpus, starting early is the key. A proper retirement plan in place early in your career can ease your worries about the future. Set various financial goals and get started with investing now. Start investing small amounts if you feel comfortable. When you gradually move up the ladder and your income will increase and you can also consequently increase your investments. A systematic and disciplined investment plan will help you gain maximum returns in the long run as the compounding and rupee cost averaging will show its magic.
Cover yourself against critical illnesses
A sudden and unfortunate critical illness will instantly wipe out your entire savings, affecting your future financial goals. With the rise in stress levels and sedentary lifestyle, critical illnesses are no longer rare. A critical illness can affect any time without a prior warning.
In such a scenario, it is imperative to have the financial shield to combat the ailment. By covering yourself against a critical illness plan, you are choosing a lifesaver that will help you overcome such crises with an optimal level of preparedness.
Long term plus short term investment plans
To ensure that your corpus lasts for a longer duration, divide your retirement in two phases – first 10 years of retirement and post-10 years. On the first phase, you can decide to invest a portion of your portfolio in high-return funds like equities. This will ensure the value of your corpus grows strong enough to battle inflation. On the second phase, you can then immediately invest this earned corpus in an immediate annuity plan in order to start receiving regular monthly income.