When you are young, you have more time to plan for your retirement. But as you age and near retirement, you have little time left to plan and you need to make the right decision to ensure a sufficient financial cushion for a happy life after retirement. Among other things, you should consider health issues and expenses when planning for your retirement. CA Amit Gupta, MD, SAG Infotech, shares her knowledge of financial planning and suggests some tips for people approaching retirement with health concerns:-
How to plan for your retirement as you approach retirement
“Retirement planning is about calculating the estimated amount you would need after retirement to comfortably live your post-retirement years and making appropriate plans, including investments and savings, based on your risk appetite to accumulate that amount. . Depending on your risk appetite and target amount, you can diversify your investments into stocks, debt, FD, etc. ”, says Amit Gupta.
“As you get closer to retirement, your ability to take risk will diminish, so you’ll want to keep a large portion of your investments in low-risk debt funds and fixed deposits, where your money remains safe over time. According to experts, it’s wise to start shifting your equity investments to safer debt investments about three to four years before you plan to retire. Additionally, you should put your retirement money in options that offer ample liquidity so you can seamlessly access funds after retirement,” Gupta added.
“As a first step, estimating your post-retirement expenses is extremely crucial. You don’t want to overspend, but you want to have enough money to live comfortably after retirement. You should also consider the after-tax returns on your investments when planning for retirement,” he added.
“Another thing people approaching retirement often wonder about is where is the best place to put their retirement money. Well, you want easy access to funds, but at the same time, you should expect the corpus to pay at least as much in return as the rate of inflation, so that the value of your corpus doesn’t decrease too much over time. Choose options with minimal risk. Most people in India choose to invest their retirement capital (lump sum) in a safe and reliable annuity plan, preferably with a life insurer, which will pay monthly or annual payments as chosen by the investor. Annuity plans will typically have a payout period equal to the investor’s remaining life, meaning you’ll continue to receive monthly/annual payments for as long as you live,” he suggested.
Planning for health problems after retirement
“As you get older, your health problems will increase and you will probably need to visit the doctor more often than when you were younger. So be sure to consider health-related expenses when planning for retirement. The best way to do this is to invest in a suitable health insurance plan. For people nearing retirement, a senior health insurance plan is ideal. The plan gives you comprehensive protection against common illnesses and might also cover your routine doctor visits, checkups, and medical bills,” he suggested.
“For seniors who have existing health problems, a senior health plan would have a copay clause that requires the patient to pay a portion of medical expenses or a 2-4 year waiting period for existing conditions only. . When shopping for a retirement health insurance plan, you should carefully review and compare the features of different products and choose the plan that best suits your particular needs. For example, some plans may not cover pre-hospital expenses. Others may not offer cashless treatment where the patient would initially have to pay the expenses and then be reimbursed by the insurer,” she opined.
“As you get closer to retirement, your ability to take risks decreases, so it is crucial to plan carefully and invest in retirement plans that are safe and liquid. Depending on your risk appetite, you can invest in debt, FDs, stocks, and other options. Make sure you have enough health insurance to deal with any expected and unexpected post-retirement health problems. Also, try to reduce your debts (loans, etc.) as much as possible before you retire”, he concluded.
(Disclaimer: The opinions/suggestions/advice expressed here in this article are solely those of investment experts. Zee Business suggests its readers consult with their investment advisors before making any financial decisions.)