When the time comes to planning your retirement, there are certain myths that you might be guilty of blindly trusting. While we understand that your retirement might be years away, it’s imperative to remember that saving up for the future is one of the most vital things you need to do. So, to help you separate myths from reality, we have debunked some of the most believed retirement-planning myths.
1. I am Too Young to Be Saving for Retirement
True. In fact, the earlier you start saving for your retirement, the more you can save. In an ideal scenario, you should already be planning your pension right from the day you start working. You might think that you have more than enough time to plan for your golden years, but a small misfortune could completely dismantle your financial plan.
2. I am Too Old to Save for Retirement
If you have abruptly woken up on the wrong side of 40 and grasped you have not planned for a time when you are no longer a salaried individual, don’t worry. Though it could have been good for you to have planned early, you can still catch up. You can invest money in a medium-risk Unit Linked Insurance Plan (ULIP), which will assure you good returns in the long run. You should also diversify your investment portfolio and put in a minor percentage of your savings in investments that could give high returns.
3. I Don’t Have Enough Now to Save for Later
If you’ve just started working, you may feel like your salary is too low to pay for all your expenses, leave alone save for later. However, it’s crucial to remember that when it comes to building a nest egg for your retirement, a little can go a long way. You can opt to put a tiny amount of money away every month in a recurring deposit. Otherwise, you can even find yourself an appropriate pension plan and pay an annual premium. If you look at the numbers, you can get yourself a substantial retirement plan for only Rs. 2,000 per month.
4. The Stock Market is Too Risky
Most people feel like when it comes to saving for retirement, they can’t afford to lose money by investing the stock market. While there are some integral risks in investing in stocks and bonds, there are ways in which you can secure your money while still earning returns. A ULIP will let you to pick the kind of funds you want to invest your money in. Depending on your risk appetite, and the returns you are looking for, you can invest in a combination of high, medium, and low-risk funds
5. I Can Use Some of My Retirement Money and Save Later
It is not a good idea to withdraw your retirement fund before you need to. If you need a little extra money to help you pay for any obligations, you can take a loan instead of withdrawing your heard-earned savings. The logic behind it is simple – while you are working, it’s quite easy for you to apply for and repay a loan. In contrast, once you have hung up your working gloves, you might still get your loan application approved, but paying it back without a stable flow of income could become extremely risky.
Now that the retirement records are straight, make cleverer choices when it comes to planning for your retirement.