Many times the inevitability of retirement and the importance of retirement planning only hit us when we are in our 30s. If you don’t want to work after your retirement years, you have to take some crucial saving and investment decisions when there is still time.
As life expectancy has increased steadily in the country, retirees can expect to extend their retirement life 25-30 years. Moreover, as there is a complete lack of any comprehensive social security system or government-sponsored plans for private employees, it is even more crucial for Indians to have a robust retirement planning system in place.
Thankfully, Indians seem to have understood its importance. A recent survey by an insurance company showed that close to 55% of the working population in India saves for retirement compared to 39% globally. Also, close to 50% of retirement savings comes from self-savings and investments compared to 30% globally.
However, to succeed in your retirement plan, you need to know how to make the right investment decisions. You must know whether ELSS, mutual fund investment through a systematic investment plan (SIP), or investing in bonds, corporate fixed deposits, ULIPs, etc. will work for you. Apart from the investment tools there are several factors that you need to consider for successful retirement planning.
The importance of wealth management for retirement
Wealth management offers a holistic, 360 degree approach to your retirement planning by assessing your needs, life stage goals and risk appetite. It’s difficult to objectively plan for retirement when you have a job to do or a business to handle and it becomes even more difficult when economic conditions are uncertain worldwide.
A wealth manager can not only help you choose the right asset to invest but guide you along the right path leading to your financial goals. He will help you protect your wealth, minimise expenses, save taxes and help you grow your wealth in a stable and ethical manner.
Wealth management helps tailor the retirement plan according to your needs. That is why Tata Capital Wealth management solutions are crafted to suit your lifestyle. You can choose from a wide array of products across asset classes, including tax-saving mutual fund investment through ELSS or systematic investment plans in equity and debt mutual funds.
How wealth management helps you avoid the 4 mistakes of retirement
For your retirement planning to succeed, you need to be aware of a few important things. Wealth management helps you avoid these 3 major mistakes of retirement.
Keep it separate
Your retirement plan is a separate entity from your other investment plans. It’s a good idea not to mix two different life stage goals in the same financial plan. For example, if you are saving for life after retirement, don’t plan to fund your children’s marriage or higher education from the same corpus.
Instead, create a separate investment plan for each of these life goals or milestones. Remember that a retirement plan is to help you live your life to the fullest even after retirement. The retirement fund must be able to sustain you for the next 15-30 years if you live till 90 years. This is where a wealth manager can help you chalk out a fool-proof investment plan. A wealth manager expertly takes into consideration a slew of factors, such as inflation, medical costs, health insurance prices, your risk appetite etc., in order to chart the course of a retirement plan that is tailor-made to your needs and ensures air-tight security of capital at the time of retirement.
Regular income is a must
Wealth managers advise that instead of withdrawing your entire retirement corpus in one go, it’s better to invest in an annuity plan for lifelong guaranteed income. Managing a large sum of money judiciously is not everyone’s cup of tea and your retirement planning can go haywire if you are not careful. Regular monthly income is vital after retirement and your wealth manager will ensure that you have a guaranteed and stable source.
Well-planned mutual fund investment
Mutual funds investment through a systematic investment plan is a great way to generate substantial wealth in the long-term for retirement. However, you have to know when to switch funds based on market forces, life stage and risk appetite. Your appetite for risk is higher when you are younger – this is the time when you can allocate a larger portion of your investment in equity funds. With time, you can lower your exposure to equity and bring it to a minimum before maturity. Wealth manager can help you track market conditions and make switches and allocations at the right time and on the right funds to optimize your investments and mitigate risks.
Wealth managers have the experience and expertise to help you secure your retirement with well-informed investment decisions and robust retirement planning. They understand that retirement planning is not a one-size-fits-all solution and it needs to be tailored according to individual needs and goals.
If you are looking for holistic, reliable and result-oriented wealth management solutions, let Tata Capital Wealth help you with a wide spectrum of products across asset classes, each picked with due diligence after exhaustive research. We aim to provide not just the right solution, but the one that perfectly matches your investment goals. On the Tata Capital website, you can even make use of a handy, easy-to-use investment calculator to plan your retirement goals.