Retirement Planning: In the midst of approaching retirement and health-related problems, a special strategy should be made for how to make financial planning effectively.
Retirement Planning: Retirement planning is not done in a day, but it is a continuous process. Planning should start by setting goals and estimating the time available. This will help in preparing to deal with situations like sudden need of money after retirement. At the same time, health problems increase with increasing age and the money received on retirement goes towards hospitalization expenses. In such a situation, a special strategy should be made for how to make financial planning effectively in the midst of retirement and health related problems. It is being told below.
Make financial planning close to retirement
- Retirement planning includes your investment limits, estimating post-retirement expenses, tax deductible returns from investments and estimating risk appetite.
- For retirement, one can accumulate a large amount by investing in equity funds, stocks etc. But about three years before retirement, one should withdraw the money accumulated over a long period of time in equity funds and put them in debt funds. Investing in equity is volatile. By investing in debt funds, you can regularize the income after retirement.
- The exit rate greatly affects your retirement portfolio. In such a situation, you should estimate your post-retirement expenses and net profit after tax on investments, as this affects how much you withdraw every year.
- If you have only one year left in your retirement, then you can invest in an immediate annuity plan from any life insurance company. In this, you have to pay a lump sum premium and the life insurance company starts paying the annual annuity immediately. You can choose the period for which you want to take this payment, according to your needs. If you can take the risk, then you can choose annuity schemes linked to the stock market in which the annuity is volatile. Keep in mind here that annuity schemes give lower returns than most fixed income investments and the money earned in it is taxable.
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health insurance near retirement
- In old age there can be health problems like diabetes, high blood pressure. Apart from this, the treatment of health problems is expensive and lengthy. In such a situation, you must take a senior citizen health insurance plan when you are nearing retirement.
- Even if you have comorbidities and already have any disease, you can take Senior Citizen Health Insurance Scheme. For example, most senior citizen health insurance plans have a waiting period of 2 to 4 years for pre-existing diseases. After the waiting period, you will get cover for these as well.
- In many senior citizen health insurance plans, there is a provision of co-payment for people with health problems. Whenever you make a claim in this, you have to bear a part of the treatment cost. Always opt for co-payment if you have a chronic illness. In this situation, the insurance companies are ready to insure you, as you pay a portion of the hospitalization expenses. Other than this
- You must check out the features of a senior citizen health insurance plan. For example, whether the plan covers pre and post hospitalization expenses, day care treatment and lifetime renewal option. Day care treatment is a medical procedure that requires hospitalization for a period of less than 24 hours.
Pay off debt and put some money in equity
You should not take unnecessary risk with your money by approaching retirement as a wrong investment decision affects your retirement plan. However, you can invest a small part of your corpus in equity or hybrid funds. This increases retirement income and can be effective in tackling inflation over time. Apart from this, the most important thing is that all the debt should be paid before retirement because due to the remaining debt, even the best retirement plan becomes derailed.
(Archit Gupta is the Founder and CEO of Clear)