5 Biggest Mistakes In Pension - Retirement Planning
Written by Viplav Majumdar on Oct. 19th 2019
ALL THAT YOU WERE TOLD RIGHT? WRONG!
FACTS REVEALED BY FINANCIAL PLANNER AFTER
REPORT BASED ON STUDY OF 7000+ FAMILIES IN 15 YEARS
5 Biggest common mistakes that most of us make since start of career, ultimately that stress, extra working years, in some cases financial crisis after age 45 and in majority of cases it results to compromises after 60. It is a fact for people working without old pension for private sector and Government. After year 2004, the old pension has been discontinued, it had a benefit of increase of pension with DA (with inflation). This feature of the pension showed that life after retirement is comfortable.
Sadly, this is history, now the reality is different. This report has been prepared based on research on more than 5000 families from different segments of society and interview with several investment advisors, financial planners, retirement planners and bankers. In India most of us have been told to study and build career, since most of the people were protected with old pension and mostly people were in joint family system, more people were not bothered for life after retirement.
Mistake 1: Plan Retirement at 60, Not Planning Required Income For 30 – 40 Years After Age 45
Majority of families plan their retirement at the age of sixty. The brutal fact in today’s world is that most of the people should be ready with alternate income by the age of 45. We found in last 15 years that there is NO READY MADE INVESTMENT WHICH CAN GIVE YOU LIFE LONG REQUIRED INCOME. You name any investment available for pension in India, you will find that it can’t support you. Later in this report we shall discuss some of the popular investments for pension.
PLANNING REQUIRED MONTHLY INCOME IS THE MOST IMPORTANT PART OF RETIREMENT.
Mistake 2: Investing Casually
Mistake 3: Investment in Insurance Policy On Obligation Or Marketing
In our research we found that majority of people started investment in their life with life insurance policies, thy bought it on obligation from some known people. Again obligation was from your side only???
Remember insurance policies are for protection not for investment. Investment means higher returns than inflation. Unfortunately, in start of career you have limited savings and if it goes for obligation, how the assets of your life can be good? Investment and insurance should be kept separately.
In an Endowment policy of 20 years, normally instead of getting at least 4 times of the deposit you lose 30% at maturity in purchasing power terms.
Mistake 4: Delay in Planning For Retirement When You Have Practically Just 15 – 20 Working Years With Dignity
Almost 90% of 5000 families said that initially they took retirement lightly, unless their first uncomfortable side stare of boss. In job market you have regular competition form inside and out side of your organisation. Average age of employees is less. More and more people start their own venture or leave organisation gracefully to protect self respect.
The delay in planning for retirement increases the probability of self employment for longer period. What is the right age for retirement planning, it is the day you feel or become aware. It is one of the biggest requirement of life.
A normal person requires crores of Rupees to retire as per calculators, freely available over internet. The most challenging part is when some one loses initial years casually and later one loses employment. So plan your income now.
Mistake 5: Buying Pension Plan For Fixed Income For 30 – 40 Years While Expenses Grow
No pension plan can support you for sufficient pension for monthly budget. Buying pension plan is one of the biggest fatal mistakes. You may buy pension plan at the cost of your retirement.
We help you plan your income for retirement with DIGNITY!
About Author: Viplav Majumdar
Creator of System - "4 Hour Income Plan For Life" Planned For More than 7000 + Families Trained more than 200 Certified Financial Planners