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Retirement Planning: Why You Should not Neglect It

Last Updated: May 30, 2013 | 1,933 Views

'Have you planned for your retirement?’ ads are beamed on television constantly and they show up on other media as well. Many of them are great commercials—they make you think about your own retirement plans. Then, that thought is gone in a flash, and you are no closer to your retirement goals.

Most people look at retirement planning as something to do in the distant future. The attitude is that retirement is years away. Moreover, retirement planning is not exactly ‘fun’. So many people just push it away for the time being. This is a mistake and let me tell you why.

> 60 Is not that Old Anymore
Advances in medical care and research have ensured higher life expectancy in India and around the world. In the old days, people who turned 60 thought themselves to be very old. 65-year-olds today are far more young and active than our grandparents were. In India, the average life expectancy rose from 49 years in 1970 to 64 years in 2011. This figure is expected to rise further, to about 76 years, by the time 2050 rolls around. Increased access to medical care and a better overall lifestyle could take you past the 90-year post—that is an easy 30 years post-retirement. Meagre savings will not do in such a case. You will need to build a substantial nest egg.

Everyone realizes that the mortality of people has gone up with time due to the improvement of medical facilities available, the life-saving drugs, the rising concept of healthy living, etc. However, the concept of becoming old still doesn’t create much of an appeal especially if you are less than 45 years of age. However, post 45 there is hardly much of time at hand to plan for a full-fledged retirement corpus that would suffice for a healthy pension post retirement. Hence one needs to start early to plan for Retirement.

> You Cannot Run from Illness
As the years pile on, so will the ailments. How many old people do you know who are free of health problems? The way that medical costs are rising, senior citizens could potentially run through even ample savings in a matter of months if they do not plan properly. Thus, retirement planning should not only comprise a sizable amount of savings, it should also include adequate health insurance, with maybe some critical illness cover thrown in.
Thus, Retirement Planning does not simply mean creating a Retirement Corpus for pension, but also creating a Corpus for medical exigencies and opting for a Health Plan much before any illness catches onto you such that all waiting periods are over before the real need for the health plan arises post retirement.

> Being a Dependent Is not Fun
You have supported yourself and your family for several decades. Once that regular source of income is no more, it can be quite disconcerting. To become financially dependent all of a sudden can crush your hitherto indomitable spirit. It certainly helps to have a steady stream of cash coming in, even if it is a modest sum.Planning for retirement well in advance can ensure that you remain self-sufficient always.

> The Joint Family Is Dead
The rise of the nuclear family and the subsequent death of the joint family indicate that you need a retirement plan more than your grandparents did. You children may really want to take care of you in your twilight years, but their financial situation may not allow them to do so. If you plan for your retirement adequately, you could even help your kids out when they are in a financial pinch.

This is especially true because of the rising medical inflation. Hence even though the medical care and research has improved, the cost for being able to afford them has increased leaps and bounds.

> You Have Post-retirement Goals
Retirement goals have changed. Our grandparents were happy enough to stay home and help with the cooking or marketing, but those times are no more. You may want to travel the world in your twilight yearsor maybe finally open that restaurant. You might even want to sponsor your grandchildren’s education or leave them a big inheritance.Having a retirement plan in place will help you achieve all those dreams.
So, are you ready to plan for retirement? Think about all your post-retirement goals and expenses, use a retirement calculator, and start saving already!

To sum it up, the concept of Retirement has changed in today’s world and so have the aspirations for the same. Retirement is not looked at as stay-at-home anymore. Retirement comprises of all those dreams that you did not have time for while you were an active money making machine. Hence now is the time to re-look into your Retirement Goals and plan for the same as well.

Deepak Yohannan
Deepak Yohannan is the CEO of MyInsuranceClub. He enjoys writing on Personal Finance and contributes regularly on sites like Reuters & Moneycontrol. He is a strong proponent of online insurance and is often found pointlessly babbling about it!

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