As a retiree, one would want to experience all of the things that they were not able to do when they were too busy working. These experiences can differ from one person to the other. Some may want to travel around the world or pursue their passion for writing a novel; others may simply want to spend more time with their family and friends. The opportunities available to a person after retirement can be endless, as long as they have enough money to live independently and pursue their dreams. Hence, financial experts like Kavan Choksi stress upon the fact that all people must properly plan for their retirement in order to spend the last stage of their life in the manner they want.
Kavan Choksi briefly underlines how to get started with retirement planning
Retirement planning has not changed much on the surface, over the year. One has to work for years, save their hard-earned money and ultimately retire after a certain age. However, even though the mechanics of retirement planning has remained consistent, many people today face certain challenges that their previous generations didn’t have to worry about.
First of all, life expectancy today has become much longer. Hence, one would require their money to last longer, potentially into their 90s. Bold yields are also lower than they traditionally used to be. Therefore, a person cannot simply just buy a few fixed income instruments to enjoy a double-digit return. The cost of availing quality healthcare also keeps rising with every passing day.
Thinking about life as a 70-something is among the most difficult parts of preparing for retirement. A large number of people get too overwhelmed when thinking about saving for an unknown future. Fortunately, retirement planning will not seem too difficult one a person creates a roadmap that keeps them on track. They firstly need to think about how their life might look like in retirement, and list out the major retirement goals. It is important to account for inflation and plan for higher prices in the decades ahead. People need to think about the day-to-day expenses, like housing costs, food, and health care; they would have to deal with in the future. A few costly expenses that one has to deal with in their 30s, like mortgage or childcare costs, will no longer exist down the line, and hence can result in a decrease in the overall expenses as one gets closer to retirement.
A person also has to add up all types of income that they may receive in their post-working years, such as pension income, social security payments, rental income from a property, and so on. It is vital to match up the overall revenue and expenses to gain a good understanding of how much money one needs to set aside every year for retirement.
Kavan Choksi points out that while it is important to start saving for the retirement as early as possible, people should also take into account their own financial feasibility. It is okay to set money aside for more immediate needs in the 20s and start tackling retirement in the late 30s and early 40s. However, one must not wait much longer beyond their 40s for retirement planning, as they would need time to put money into a retirement account for that money to grow.