Retirement is often considered a golden period, but for many, it can bring financial worries. While many save a lot for their post-work years, the rising inflation, increasing cost of living, and unforeseen emergency expenses create concerns about the adequacy of their retirement corpus.
Retirement is supposed to be a worry-free period but it can also become a source of financial anxiety for some when their regular income stops flowing into their bank account. When your salary ends, you are entirely dependent on the corpus you have built over the years.
How to ensure your retirement corpus does not run out early
Many people face the fear of running out of retirement corpus too soon. Here's how you can safeguard:
Start planning early
The earlier you start saving, the better. You should not wait for turning 50 to plan your savings. Early planning not only improves the ability to prepare but also allows you to increase your savings and make similar adjustments to your assets. In the first few years of your career, try to save as much as you can, even if it feels like a lot.
Create emergency fund
Even in retirement, unexpected expenses can pop up such as sudden medical bills, home repairs, or urgent travel. Having a separate emergency fund ensures you don't have to dip into your main retirement corpus. It is advisable to keep 6 to 12 months of living expenses into this fund. Make sure you do not touch this fund unless it's a real emergency.
Additional income source
Having another source of income isn't just about money but it's also about security and flexibility. Many retirees or soon-to-be retirees worry about boredom so a small side activity keeps you mentally and socially active. You can get into teaching, counselling or any other work related to your field. Also, buying a house in your early days and earning rent from it can become an additional income in your retirement years.
Avoid locked-in investments
Not all investments are suitable for retirement. Some can lock your money away or carry high risk, which can be dangerous when you need stability. There are certain insurance plans, or pension schemes, that don't allow easy withdrawals. And in case of emergency, it can create a problem.
Track your progress regularly
Saving for retirement isn't a one-time task but it is an ongoing process. To make sure your retirement plan stays on track, it's important to review it regularly, ideally once a year. Compare your current savings with your retirement goals and look at how your funds are performing.
Also Read: The Rs 10 Crore Goal: Can SIPs And Your EPF Make It Happen in 15 Years?
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