Thursday, September 20, 2007

Essential DONT'S to make your retirement financially secure

While you retire, you need to build up a corpus to take care of your routine expenses as well as to face extra costs, especially for health care. It must be around 100% of your salary so that you can maintain your lifestyle without sacrficing any quality indeed.

So experts point 6 DON’T’S in this aspect:

• DO NOT pull all your money in fixeds: Essentially you might understand the situation where the deposited amount doesn’t match the inflation, for example, resulting the eventual loss in money.

• DO NOT lock in all too much money for too long: Fixed-income instruments come with a lock-in period, where money can’t be withdrawn in the middle of the term, whereas you may need that flexibility and liquidity to face your any unexpected events. So think again before you do all your savings.

• DO NOT invest and forget you need to rebalance: As after retirement, you must need money to meet your daily expenses as well as you may need withdrawing every month, which will lessen your corpus in return. So make your plan flexible and monitor on it carefully time to time.

• DO NOT forget to own your own mediclaims: “Your personal health is your personal concern, do not leave it to the company”. Do not leave all the obligations on company itself on thinking that it is entirely their responsibility even if you are informed so. Also do not forget to take care of the issue of dependants.

• DO NOT use your savings as a source of ready cash: what else I could explain! Just don’t do that!

• DO NOT take all your PF and Gratuity as ready money while changing jobs: Ahaa! It’s really wonderful to get a PF-cum-gratuity cheque from your old employer while changing job. Enjoy by giving a treat to near and dear ones! But afterwards, do not forget to take a professional consultation and invest it for the long term.

Originally published in on 24th September, 2006 19:34

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