Some of us dread retirement whereas others look forward to the opportunity when they could finally sit down and relax. Retirement is a reality, and so that life does not stop when regular income does it is imperative for us to start planning for retirement as soon as possible. Today our life spans have become long, thanks to medical advancement, diseases that were earlier considered incurable now have a cure, and people are now living longer than ever before. This means that your retirement savings too should be sufficient enough to last more than two decades.
Many of us have invested in pension funds and plans but sadly the yields are low, and we want that we should secure enough funds that could last us for the remainder of our life. Let us look at ways you can make your retirement fund last:
Don’t just rely on fixed deposits:
This is the most common mistake that most of individuals do. They invest their entire savings into fixed deposits and savings accounts. It is important to note that these savings are not tax-free. Moreover, the inflation rate is much higher than the rate of interest. This means that you are going to save much less in the end.
Get some financial knowledge:
Since we all are looking to save more, we are often fooled by financial predators who claim to be our friends, but they often get us stuck in unyielding stocks and bonds. To avoid this educate yourself; make yourself aware of all the financial instruments that you can invest in. Be updated about the latest market trends. Try and judge how news can affect the financial world. You should also look at the fund or stock history before investing in one.
Make a Balanced Portfolio:
Irrespective of your stage in your life, you should always look to maintain a balanced portfolio. A balanced portfolio ideally has stocks with varying levels of risks. However, do not shift your entire portfolio to one stock. You could invest in blue-chip companies and some other stable companies, and you could set aside some money for an underdog. Your stock portfolio should also be diverse in terms of the sectors you have invested in. So that if one sector is hit your portfolio remains stable. Some of the most stable and profitable sectors are healthcare, food and beverage, technology, industrial, etc. By spreading risk throughout the portfolio, you shall minimize your exposure to market volatility.
Look at Funds:
We all are not financial advisors, and we might not be competent enough to find the best stock of our needs so maybe picking individual stocks isn’t a very good idea. If you too are shying away from picking up individual stock, then you can choose to invest in mutual funds. Here too we would advise you that you don’t put all your eggs in one basket. You could choose a dividend plan or a growth plan. In dividend plan the mutual fund will send you the dividend amount in the latter they will invest the dividend amount in buying more shares for you. ‘in a mutual fund, you could choose to invest in fixed income plan, equity or money market. Mutual funds can prove to be extremely beneficial in the long run; however, we must advise you to look at the past performance of the fund before investing money in any mutual fund.
Choose the right insurance cover:
It is true that our life has increased due to medical advancement, but it is also true that our medical costs have also risen sharply. Also due to bad lifestyle habits, we are more prone to a certain type of diseases. It is therefore imperative that we take a good life and health insurance that takes care of our comprehensive needs. Take health insurance that is as exhaustive as possible and choose a life insurance plan and premium that can take care of your needs.
Choose the Right Financial Adviser:
There are several financial advisors that can be found in every nook and corner of the city, but it is essential that you pick the right advisor for your needs. You should be comfortable to share your financial information with him, and the advisor too should be in tune with your goals and vision.
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