Effective tips to plan retirement wisely

Retirement is viewed as relaxation as well as worrying period of life. It is very important for people to make wise plans before retirement to leave post retirement peacefully.

In order to maintain financial liberation and healthy lifestyle in post-retirement, employee needs to begin intelligent and constructive plans for financial savings.

Since retirement is that period of life when people have time at hand to relax, travel and involve in activities that make them happy and those has not been able to performed due to hectic work schedules, carefully planned and controlled actions need to be taken to meet the financial goals of post-retirement.

Major aim of retirement planning is to:

1. Evaluate readiness-to-retire given a desired retirement age and lifestyle, such as whether one has sufficient money to retire.
2. Recognize actions to improve readiness-to-retire.
3. Gain financial planning knowledge.
4. Boost saving practices.

There are some guidelines, person has to follow when planning for retirement:

1. Plan retirement early: First and significant feature of retirement planning is to plan it as early as possible. Preferably, people are advised to make viable plans as they start earning. Planning it early helps to save ample amount of money at the time of retirement. It is suggested to small savings and keep increasing the savings towards retirement as people grow in life.
2. Life expectancy: Second factor for retirement planning is to assess life expectancy. Due to the medical advancements durability of life has increased significantly around the world and India. However, it is difficult to predict how long one is expected to live but by studying the average life expectancy in the country and family's health history, person can get rough idea. In later period of life, healthcare problems considerably increases and there may be more medical expenditure because the developments in medical science help fight various diseases but those medical procedures are very expensive.
3. Set targets: Person's savings should not run out while they are alive. Therefore, while planning retirement, it is recommended to prepare a list of things that will come up post retirement. In many cases, responsibilities like daughter's marriage, children's education are still pending and sometimes, more money is required for medical needs. Checklist will help people to assess their retirement needs.
4. Show intelligence in choosing the appropriate retirement plan: When people start planning for retirement, it is about living several years of life at ease along with financial independence. It is therefore essential to be very careful while choosing retirement plans, as the plan needs to be fulfilling person's requirements. If there is any doubt in choosing scheme, people are advised to consult a financial planner before investing in any retirement instruments.
5. Income tax: Income tax management is critical part of any financial planning and thereforeit is considered significant for retirement planning. Retirement planning involves tax deferment. People do not pay tax up to a certain limit on savings for retirement now and pay the tax on annuities which they receive during retirement years.
   It is necessary to have thorough knowledge of income tax regulations as this could help people minimise r income tax liability and allow them to have more money.
6. Consider market fluctuation. Investment in various equity portfolio means that people are taking a deliberate risk. By investing in different asset classes people make their portfolio strong. ULIPs is a great option as market linked assets including equity offers superior returns as compared to long-term debt instruments. ULIPs will not only address the concern of inflation, it will also cater to person's protection needs.
7. Consider inflation while retirement planning: In current environment, prices of all commodities are increasing very rapidly. The cost of living is always move higher, therefore while planning retirement, it is necessary to observe the impact of inflation. Though senior citizens do not have more expenditure on food and clothing but their medical needs are high and these are very costly.
8. Understand retirement needs: Retirement is very expensive as there is no regular income and requirements are more. Experts guess that people will need at least 70 percent of their preretirement income but they are lower earners, 90 percent or more to maintain standard of living when they stop working. Therefore it is important to know what type of requirement will be after retirement.
9. Learn about employer's pension plan: If employer of person has a traditional pension plan, check to see if he is covered by the plan and understand how it works. Ask for an individual benefit statement to see whether it is worth. Before people change jobs, find out what will happen to their pension benefit and also understand type of benefits they may have from a former employer.

It is imperative to consider these things in mind while buying a retirement plan to make certain that people have a smooth life.

Women and retirement planning:

It has been assessed that women employee have similar priorities as men with regard to retirement. They want to live securely and maintain their health. For this women have to take care that costs covered along with their families. Biological and social considerations, however, increase the challenges faced by Indian women in monitoring their retirement plans.

Another significant aspect for women is that women live longer than men. This higher life expectationneeds higher medical and health-care costs. On an average, a 65-year-old lady will live 3 years longer than a man of the same age. This data indicates that she needs to put aside more money for retirement than a man would. Also, the additional amount indicated is generally more than pro-rata to the higher life probability.

Women have less in their accounts: In India as well as abroad women are paid less as compared to men. This becomes a major challenge for them as they have less money and life is longer.

Employment gap: Often women search for employment arrangements or retire early to take time off without any consequence. There are many causes for this. Some women take time off to take care of their baby, ageing parents or to seek other opportunities. Consequently, they may not be able to realize their full potential and their earnings. Hence, they get less money in their pocket at the time of retirement. It is recommended that women must have to think early and plan wisely for retirement.

Women have lower Social Security benefits. Females have lower income and less time in the workforce. It also means lower Social Security income which is a potentially significant blow to retirement income.

Majorhindrance for many married Indian women is their tendency to relinquish financial planning to their husbands. Due to this process, women have to leave house in the event of a divorce, premature-death or disability of the spouse. Life events can disrupt planning efforts. Obstacles that prevent them from investing for retirement, many females mention personal financial choices such as children's education. Other big problemsapparent are lack of time, , not understanding investments and compound interest and depends on husband to plan for retirement.

For preparing retirement plan, women must make retirement plans a priority. When searching for a new job, make sure the retirement plan is as competitive as the remuneration. Also consider employers that will match part or all of their plan contributions.

It is recommended that women must talk to their spouse. It is important to have a conversation about retirement needs and how much it will cost them each month.

Women must make smart investment decisions. They must educate themselves about the different investment policies to help reach retirement goals and carefully consider how much risk they are willing to take to potentially earn higher returns.

In sum, Retirement planning involves in the process to identify long term income, determining planned lifestyle and define how to reach those goals. Retirement usually comes late in the list of financial goals of most people. They usually start saving for it when they are near the end of their working life. The focus, instead, is on middle goals such as buying house or car, marriage of children. People must avoid some mistakes while planning for retirement.

It has been seen that many people withdraw money from their provident fund account. This, is wrong step as instruments such as the Employee Provident Fund, or EPF, have been designed to provide financial security after retirement. These are highly beneficial for retirement planning, especially due to their tax-free status.

Therefore, it is recommended to think intelligently for retirement planning for peaceful life.