5 principles to make a wise investment decision for retirement planning
Retirement is the most memorable part of a person’s life. Everyone wants to acquire financial stability and satisfaction after retirement which is impossible to attain without a perfect plan for it. Retirement planning in terms of finance mainly aims to encourage saving practices, improving your readiness to retire and attaining financial freedom after retirement. An innovative & encouraging financial plan needs to be implemented during service period so as to boost your retirement income. When your income suits your lifestyle choices, you’ll find your retirement to be enjoyable.
Components of retirement income planning
Retirement income planning can be categorized as Personal Planning & Financial Planning. Personal planning is necessary to determine how much do you satisfied with your retirement style. Financial planning for retirement on the other hand is complex because it establishes your retirement budget by managing your existing budget including expenses.
Is it possible to invest after Retirement?
For a retiree, it is very difficult to take a decision of investment on any mutual fund or insurance policy. It is because of limitation of their income in comparison to their earning before retirement. However for them, there are some attractive short term investment plan for 5 years & 10 years also now introduced in the market which delivers a good return after the completion of respective period.
Principles you must follow for retirement investment
Whether you’re investing before retirement or after it, your wise investment is mandatory to build a strong financial profile. Here are some basic principles which you should keep in mind while making financial planning:
Clear your debts first:- Before investing in retirement, it is recommended for an investor to live debt-free by paying off high-cost debt first. This is the basic rule to achieve inflation beating & attractive returns in every long term investment planning.
Choose user-friendly product for investment:- For a newbie in the field of financial planning, it is quite challenging to choose a right product for financial planning. You should invest in a product that you understand. However, it is better to discuss with a professional financial advisor before investing in order to get familiar with the rewards and risks of that product.
Don’t make immediate investment decisions:- For a better saving, it is always suggested to not make immediate investment decision based solely on advice of any relative or friend. It is advisable to consult with Financial Advisor for before making any decision.
Evaluate your comfort level with risk:- Mutual funds investment are subjected to low market risk than stocks and bonds. Therefore, investment on volatile products may be risky with respect to your future planning. You must make a wise investment decision by evaluating your comfort level with risk.
Prefer Tax-Advantaged Investment:- There are some special tax-advantaged investment plans available for financial planning where investors get provision to defer income tax on money that they keep aside for retirement. Such tax-advantaged policies grow tax-free until its mature period.
These are 5 most important rules that will help you make a wise investment decision for retirement planning.
Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.