Retirement planning is the financial support, in form of savings and other physical assets, for financial independence in your old age. It is aimed at giving you a relaxed lifestyle with enough money in your hands so that you can live the way you want without being a burden on anyone else. Retirement planning starts with planning your retirement goals such as where you want to live, how much you want to travel etc., and how you are going to fund them. It is a multistep process conducted over a period of time during your working days so that you can have a secure, comfortable, and fun life after your retirement.
Retiring at 60, cannot be taken for granted anymore. Advances in health care mean we are living longer lives and for long lives, we need more money. So, most people who don’t plan their retirement end up working well into their 60s and sometimes even into their 70s. Working for the fun of it is one thing but working out of compulsion, just because one didn’t plan sufficient finances takes a toll on one’s golden years. It is always a better idea to plan for your financial independence even if you have a supportive and caring family because you never know how people change and perhaps even if the right intention is there, family members may just not be able to support you financially in your old age if they have their own family commitments. Many people suffer a lot during their retirement when they are forced to live alone without proper financial support. This is why you need to be prepared for all kinds of situations and think seriously about your retirement goals.
Retirement planning is the process of identifying your retirement goals, expenses, savings, emergency situations, and your sources of income for a secure and independent life. Here’re some key reasons why you need to plan for retirement.
Medical emergency: Retirement planning means you are planning your life after the age of 60 that means different health problems may arise with rising age and you should be prepared for that. Medical expenses are the biggest financial support that someone needs in post-retirement life. With enough savings and a good medical insurance plan shall mean you will be well-taken care of during any emergency medical condition.
Your pension plan: Private sector employees usually don’t have any state-sponsored pension schemes like government sector employees and they should plan it by themselves. Pension is like your regular income post-retirement to pay for your day to day expenses. You can invest in different investment plans or buy a retirement plan that guarantees monthly pension after your retirement at a certain age. If you are on your own, a pension is like your social security during those days.
You are your own family: Long gone are those days when families live together and support each other. With a rapidly changing family culture, you need to plan for your monetary support and social security to ensure that you will have enough savings for staying separately. In today’s competitive lifestyle, children are also forced to achieve more in their life and sometimes even they have to relocate to another country for their jobs. You should also consider this scenario while planning for retirement at 60.
You can start your retirement planning at any stage of your professional life. The earlier you plan for this the smaller amounts you need to put away to secure your future. The later you start, the harder it gets. Now is a good time for you to start planning for your golden years. This is the best time to determine your retirement planning goals and investment strategies. You can contact New Age Insurance Brokers and one of our qualified financial advisors will help you with your retirement planning and financial strategies for a secure and financially independent post-retirement life.
Retirement planning is all about ensuring that one is reaping the benefits of working hard during their younger years. It means that one is able to live a life of dignity and respect, that one is able to do things in their final leg of life that they just did not have the time to do.
Despite retirement being an inevitable phase of life, many of us don’t prepare for it. We tend to overestimate the time available to us to plan for our retirement. So, when retirement is actually around the corner, most of us are underprepared. This results in either working for more years than we actually planned on working and/or compromising on the quality of our retirement life.
This is validated by data that we currently have. In the UAE, a survey led by HSBC found out that only 44% of UAE citizens feel that they will be comfortable after retirement. 63% of them responded they plan to work even after retirement to some extent.
In this guide, let us walk you through the do’s and don’ts of retirement planning in Dubai and why it’s imperative that you have a plan in place.
The do’s of Retirement planning
1. Decide what kind of retirement you wish to have
Setting clear goals is the first and foremost thing one should do. These goals will be unique to each and every person based on their current lifestyle and what is it they envision for their future. So ask yourself questions about which part of the world do you want to retire in; where is it that you want to retire: your home or a retirement home; how much do you want to travel; what are the kind of things you would do with your time etc. While you may not have exact answers to these questions now, starting to think about them will help one to start visualizing your golden years.
2. Decide how much money you would need
Once you have defined clear goals, one can do the number crunching on what kind of money is required to achieve that life you have envisioned for yourself. While you are calculating the total costs, do not forget to factor in inflation. Having goals along with knowing how much money is required to achieve those goals will help make retirement planning easy, and moreover, predictable.
3. Start investing early
The sooner you start putting money aside towards your retirement, the higher the likelihood that one will be able to achieve their retirement goals. Time is a wonderful thing that helps even small amounts of money compound into large sums of money over a period of time. The later you start, the more the amount of money is required to be put aside to achieve your monetary goals, if you don’t want to compromise on your dreams.
The don’ts of Retirement planning
The don’ts of retirement planning is all about staying away from financial decisions that will hurt your retirement savings. We will discuss the key points below.
1. Don’t be overconfident in your earnings
Being overconfident in your earnings is a very easy mistake to make. Economic cycles go up and down and along with that one’s ability to earn. So saving up for the rainy day is very important so that you don’t dip into your retirement savings. In addition, there is a common misconception that the more you earn, the more you save, but that is rarely the case. We raise our standards of living along with our earnings which means that our savings remain stagnant and don’t necessarily rise with our earnings. So always keep an eye on how much you earn and how much you save. If you earn more, make sure to save more.
2. Don’t overspend
Overspending can burn a hole right through your savings in no time. In other words, don’t put want ahead of needs. Make sure you are spending within limits and not getting into the vicious cycle of debt.
3. And did we already mention, don’t wait for the last moment?
Time is money. Don’t wait for the last moment, start planning for your retirement today.
The golden years await…
Retirement planning is not something that can be done in a day or two. It takes years of planning and saving. But the result is totally worth it. And getting the right guidance at the right time is very important.
New Age Insurance Brokers can help you in that regard. We have one of the largest portfolios of retirement plans from various companies. The experts at New Age Insurance Brokers will help you find retirement plans suited to your requirements. Contact us today to know more!