With increased life expectancy, planning for a post-retirement span is crucial. However, people often make common mistakes due to the distant goal. Therefore, identifying these 14 pitfalls and avoiding them is essential
Resist withdrawing from your EPF for non-retirement purposes. It's designed for post-retirement financial security. Avoid this move and use alternative income for buying a home
PPF is a valuable retirement instrument due to tax benefits. Open an account early, as it offers tax-free returns and can provide a substantial corpus over time
Rising medical costs in retirement demand adequate health coverage. Employer coverage might end post retirement, so ensure you have an individual plan or port your group policy
Include an emergency fund in your plan, accounting for unexpected expenses that arise. Contingency planning is crucial for sustaining your post-retirement lifestyle
Early retirement aspirations are valid, but they require a substantial corpus. Plan meticulously to ensure your dreams align with your financial reality
Minimise investment fees by researching low-cost funds and considering direct mutual fund plans. Choose cost-effective options like National Pension System (NPS)
Purchase sufficient life insurance coverage. It's essential for supporting your family's financial well-being after your passing
Commence retirement saving early for the power of compounding. Delaying could force you to save more aggressively later
Factor in inflation while estimating the retirement corpus. Ignoring inflation can lead to a shortfall in your post-retirement funds
Allocate your investments wisely among asset classes, including equity. Neglecting equity could hinder returns and goals
Expect a slight decrease in expenses post retirement, not a substantial reduction. Account for potential increased costs like healthcare and travel
Home ownership can reduce expenses in retirement. Consider purchasing a home before retirement to save on rent and gain security
Pension and interest income is taxable post-retirement. Plan for tax payments on your retirement income
Be realistic about investment returns, especially with equity. Unrealistic expectations can lead to disappointment and poor decision-making