Balancing your retirement and financial goals
We often come across the dilemma when we have to decide whether to give priority to our retirement planning or to move towards investing for other financial goals for life. There are a lot of clients who find it difficult to cope up for maintaining their retirement investments along with the other requirements. Hence, they drop out the idea of retirement planning and move forward towards realizing the other needs which form the basic requirements like house, children’s future, etc. But, retirement is equally important as in today’s scenario a major portion of the population is employed in the private sector. There is no provision of pension for the private employees. You are an asset to the company till you have the capacity to work and give the required output to the company. And after that, you become a liability which is never borne by the company. So, you have to think for your future yourself because as and when your age increase needs will not diminish.
The following steps might be useful for you in order to make it possible to invest and grow along with planning for your retirement:
Prioritize your needs
It is observed many times that the clients are not able to mark their requirements according to their priority. There are a lot of people who tend to make investments for the insignificant tasks and tend to miss out the essential ones. For example, buying a luxury car can be put on hold or ignored, but planning for your child’s future must be on high priority. Thus, instead of investing for purchasing a luxury car you can divert that money towards your retirement planning by investing in one of the equity schemes of the mutual funds.
Stabilize your debts
The loan culture these days is gaining momentum as people have the capacity to pay back the debt and enjoy what they want. Banks, private finance institutions, etc, are ready to give loan to their clients and charge a floating compounded half-yearly rate of interest from the clients. Even the 0% finance schemes are nothing but a misleading marketing strategy. Thus, a client must not take too many loans as they will either eat up their savings when they retire or delay their retirement to pay the outstanding debts. Instead they should actually invest that amount through mutual funds to increase their riches when they retire.
Timely commencing the investment
We all know that the power of compounding and rupee cost averaging are the factors that work in the favor of mutual funds. It implies that as soon as you begin investing in mutual funds to plan for your retirement, every penny will get more time to multiply itself. There are a lot of clients who start planning for their retirement after their 40s tend to accumulate less amount as compared to the people who begin it early in their 30s itself. The clients have to be vigilant enough to commence their investment as soon as possible. It will not only help to build up the required amount for your retirement, but will also facilitate you to earn a copious return as well. If you invest early then you need to sacrifice a smaller amount while a late start will cost you more. Thus, start your investment as soon as possible.
Plan and then invest
Planning for your investment is undoubtedly an important task. But, blindly putting money into any of the schemes will not yield the proper output for the invested amount. For example, if you want to do mutual fund investment with a view to have capital appreciation and you invest in a fixed income fund. No matter how consistent you are in your investment you will not be able to get the expected return on your investment. Thus, to get a proper return you need to invest in the correct scheme which will require proper study and consultation (in case you are new to the financial market). The reason for selecting the correct scheme is to save money and time.
Thus, mutual fund investments can be your best friends which could facilitate your retirement planning in a better and shielded manner. So, begin early, choose wisely and invest consistently is the three step strategy which makes you millionaire even after retirement.
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