Can you imagine living comfortably after retirement? Most people would say yes to this because they will no longer be working in offices full-time. Now, tell us, would you have enough savings to enjoy your life and plan vacations after retirement? Here comes the real dilemma.
Most people think about enjoyment after retirement but don’t account for the fact where they will be getting the money from. Some people might say that they will get the service gratuity for that. But is it enough?
To be honest, the amount you get as service gratuity is often nominal that won’t even allow you to fulfill basic, let alone it being enough for shopping, vacation planning, and all that you might have dreamt about after retiring.
Thus, if you really want to enjoy and live comfortably later in your life, you need to prepare a thorough investment plan
What You Need to Know to Grow Your Wealth for Retirement
Savings and Investments
There should be enough income flow every month to achieve a financially independent life post-retirement. Steady income flow is only possible when you have savings and investments i.e. you have a sufficient nest egg. You can easily calculate how much you would need for retirement by using our online calculator. Once you have figured out how much you need for your retirement, it is time to figure out how to get there.
Diversification of Investments
One has to systematically build up their savings and discipline is key. Based on your risk tolerance and financial goals, you can choose from several investment options available in the market. Remember that “risks and returns go hand-in-hand”. So, don’t put all your savings in one place. Diversify your investments into various portfolios to reduce the risk factor and earn good returns simultaneously.
Investing in the Home Country and Foreign Countries
People living in the UAE tend to invest in the UAE itself because the UAE allows ex-pats to invest regardless of their nationality and offers lower taxation obligations compared to other countries. However, you are not restricted to the UAE. You can step into the outside world and consider investing directly in locations like U.S., India, Europe through various platforms and across multiple asset classes. But before investing, don’t forget to factor in tax benefits, security, asset protection, investment cost, and currency fluctuations.
When it comes to investing, you have a plethora of investment options, such as real estate, bank fixed deposits or term deposits, stocks, pension schemes, mutual funds, gold, and so on.
What to Consider While Planning Your Retirement
The Right Age to Start Saving – There is no particular age to plan for retirement. The earlier you start to save, the better your life will be after retirement. It is usually recommended to start saving in your early 20s and 30s because, during this age, people have a higher risk tolerance and can save more because the time to retirement is longer.
Determine how much retirement fund you need – You should calculate it based on how much you need to live after retirement comfortably and what plans you have for your retirement. Consider all potential costs, including medical emergencies, routine healthcare checkup costs, and vacation costs based on places where you will want to go. Take inflation and rising healthcare costs into account; otherwise, the amounts you are planning to earn for retirement living might not be sufficient.
Apart from inflation, you should also consider taxes because economic conditions are volatile and, sometimes, unpredictable. Besides, you should not disturb your emergency funds as they will help you during critical situations.
Risk Factors – Before choosing an investment portfolio, do homework on the risks involved. If your retirement is near, investing in high-risk options could be a huge mistake because the risk tolerance decreases with age and you don’t want to risk your hard-earned money. In case you have 25 to 30 years for your retirement, you have more freedom to explore different options.
For a lot of people, retirement could be two to three decades later from now, and thus, they tend to postpone their retirement planning. Eventually, when they will realize the importance of retirement planning, it becomes too late to save and invest much. Thus, start looking for smart avenues and start taking action to prepare the best investment plan after retirement as early as you can.
At New Age Insurance Brokers, our expert advisors will help you go through different investment options along with their pros and cons to properly plan for your financial stability after retirement. For more info, email us at firstname.lastname@example.org.