Most people think of retirement as a time to relax - do the things they love, spend time with family and friends or invest time in hobbies and recreational activities. However, for a lot of people, the ability to afford a good lifestyle during the retirement years is a very real concern. However, there are a few tips that you can use to plan your financially relaxed retirement. A retirement calculator can help you plan the amount of money you need to put aside for your glory years. Let us take a look at these tips.
- Find out how much money you would require during your retirement years
This is a very important question when it comes to your retirement plans. How much income would you need during your retirement years? This question is kind of personal and it requires you to have a good understanding of your daily expenses. You would be spending less time on some things and more time on others. You need to start by making a note of your daily expenditure. You should make a note of the fixed expenses like rent, groceries, utilities, pharmacy. taxes and insurance. You can then consider discretionary expenses like clothing, gifts, travel, and entertainment.
- Save money and make it a practice
You need to save about 10% - 15% of your gross income for retirement. If you work in a company where your employer matches your contribution, then you would be able to adjust your contributions accordingly. However, if you are just getting started, you can contribute a lower amount. You can bump up by 1% or even 2% every year and get to the 10%-15% mark within a few years. You can save with the help of employer-sponsored schemes like The Employee Provident Fund. You can even put money in National Pension Scheme or Equity-Linked Saving Schemes.
- You have to cut down on your expenses
When you start to put some money aside, you might find that your bank account looks a little depressed. However, you can get back to a good place by making an honest evaluation of your expenses. You might be able to cut down on a few things. You need to start by creating a detailed list of your spending. You can collect your receipts, bills, and banking statements. There can surely be some unexpected expenses, but you need to focus on the day-to-day expenses. You can try saving on electricity and gas bills and spending on fancy things a little less.
- Put money in the proper investment devices
When you put the numbers in a retirement calculator, you are dealing with inflation. You need to invest in funds that can beat inflation. You can get help from a professional. You can put your money in a mutual fund. Every fund has a goal and you can check out the fund portfolio and see if it matches your risk appetite. Your retirement savings need not be a mystery. You need to spread out your investments over mutual funds, stocks, and bonds, or exchange-traded funds. You can even consider gold, silver, and real estate.
If you would like to plan a financially relaxing retirement, these are some of the tips you can follow for your retirement plans.
