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Five Retirement Planning Mistakes That You Should Avoid


Retirement is deemed to be the 'golden period’ of one’s life. With no deadlines to worry about and no work pressure to endure, days are idyllic and to be spent in leisurely activities, revelling in your favourite pastimes or pursuing your long-standing dreams and hobbies.

Retirement will relieve you of your duties, giving you that freedom to do whatever you always wished for. However, it will also deprive you of your regular source of income. So how will you manage to enjoy post-retirement lifestyle without having sufficient amounts of fund in your bank account?

Making ends meet post-retirement is certainly far from being the ideal thing to happen. Unfortunately, this could the saddening reality if you remain improvident and fail to do the proper retirement planning and investments beforehand. Today, several insurance companies, such as MaxLife, have come up with retirement savings plans that secure your post-retirement age as well as offer financial security to your loved ones. These plans not only provide you regular pay-outs in the form of pension in the post-retirement age but also offer maturity benefits in the form of lump-sum amount, which you can later use to your long-standing plans such as world travel, financing a second home, etc., post-retirement.

Naturally, being wise with your finances is the most important plan of your life. Improper planning can leave you with insufficient funds, thereby forcing you to seek monetary help, or worse, sell your existing assets. Mentioned here are a few mistakes which individuals often make, which you can avoid, while doing retirement planning.

Not Assessing the Cost of Living Properly

The first question that really matters while retirement planning is “How much funds are needed to sustain my current lifestyle?” Many people are unaware of the exact figure and often end up choosing an amount that is too high or too low. The greater the amount you plan to invest, the higher will be its toll on your monthly budget, whereas a lower investment amount might leave you to cut corners at that age, depending on your lifestyle. In addition, the factor of inflation will affect the cost of living, thereby forcing you to spend more in future. Take into consideration all these factors while assessing your cost of living.

Not Planning for Healthcare

In today’s fast-paced life, keeping good health is often a tedious task. With numerous ailments and medical conditions that come with the old age, treatment costs will burn a hole in your pocket, forcing you to break your savings early or avail monetary help around. To avoid such circumstances, it is recommended to avail a health insurance plan that will take care of uncalled medical expenses and hospitalization during your old age.

Not Allowing Investments to Grow

Several individuals plan for retirement at a very late stage in life, thereby getting only a few years for their investments to mature. Similarly, individuals do have the habit of breaking down investments to overcome financial difficulties or emergencies. To get the expected returns on your investments, it is recommended not to do partial or complete withdrawal before the maturity date, thereby helping you get the best returns.

Not Diversifying your Investment Portfolio

More often than not, people tend to invest in a single investment product, neglecting the possibilities of higher returns that could be availed by investing in different plans. There are a gamut of products such as savings plans, fixed income plans, whole life plans, mutual funds, and a mix of aggressive as well as conservative investment instruments that offered substantial capital, thereby helping you gather sufficient funds during the post-retirement period.

Not sorting your debts

Long-term debts such as home loans, property loans, vehicle loans, and payment of monthly EMIs for various long- and short-term investment goals linked with child education, marriage, buying second home, etc., will take a major chunk from your monthly income. Now imagine such debts continuing even after you retire. Such payments will put a heavy toll on your financial health after retirement. To avoid such scenarios, make sure that you take care of all your debts before the age of retirement.

These are five common mistakes that individuals make while planning for the retirement. Avoid them and secure your future financially today by investing right in a retirement plan.

Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and Forever Young Pension Plan(UIN: 104L075V02)is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. Past performance of the funds does not indicate the future performance of the funds. You may be entitled to certain applicable tax benefits on your premiums and policy benefits. Please note all the tax benefits are subject to tax laws prevailing at the time of payment of premium or receipt of benefits by you. Tax benefits are subject to changes in tax laws.


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