Gaurab Parija, Head- Sales & Marketing, Bandhan AMC
Planning for Financial Independence in Retirement
Achieving financial independence for retirement is an aspiration that requires careful planning and disciplined execution. It is important to understand that this process is a long-term journey, involving multiple steps and steady adjustments. Considering one’s current financial conditions, setting clear goals, and building a solid savings plan, all make up important parts of what your life after retirement will look like. The main aim of a robust retirement plan is not just about reaching a state where one’s savings and investments cover basic living expenses but about going beyond that to live a desired post-retirement life, shares Gaurab Parija, Head- Sales & Marketing, Bandhan AMC.
Freedom to spend the retirement years in pursuit of passions, travelling, and just enjoying life free from financial worries can be within reach with some careful planning and disciplined financial management. A well-defined plan for savings is about being able to make choices based on personal desires and not just financial necessity. Setting clear retirement goals is the first step to attaining the same. It is important to decide what the idea of financial independence during retirement means to oneself, taking into consideration the age at which one intends to retire and the desired lifestyle they wish to lead. Having defined retirement goals helps in keeping your financial planning focused. Your envisioned retirement corpus should also take into consideration basic post-retirement expenses like health care and living expenses, among others. Keeping these key factors in mind can help chart out a realistic financial plan to ensure that you live a desired life throughout retirement, he adds.
It is also important to take into account the fact that your retirement savings will be eroded by the effect of inflation over time. You will need to ensure that you have diversified investments and access to assets with potential returns above inflation. Inflation projections as part of financial planning help in preserving your savings’ value for the long term. Check your financial goals and budget from time to time to accommodate changes in the economy. The better prepared and more adaptive you will be, the more insulation your retirement income will have against the eroding forces of inflation, Parija explains.
Retirement planning is a continuous process that requires constant attention and changes. Doing so keeps you on track toward the goals set out in your retirement plan through periodic review and updating. Conducting annual reviews to assess your current financial situation with regard to the accomplishment of your goals and investment performance is crucial. You need to adjust your retirement plan when you go through a significant life event and keep up-to-date with the changing economic situation and make the necessary adjustments in your investments. Adopting a dynamic approach toward planning and giving yourself a clear view of your needs will help you further position and build a strong base for a safe and fulfilling retirement, Mr. Parija concludes.
