It is not easy to keep up with financial responsibilities all the time but it is undeniably important. EMIs, home loans, car loans, etc. have to be planned out carefully but when you enter your 60s, you wish things are handled better.
Smart prior planning is essential, no doubt, but a bit of smart precaution can go a long way. Remember to avoid these slip-ups when working out your personal finance checklist, for a worry-free retirement:
Forgetting to take stock of your assets and liabilities - A couple of years before you retire, you should make a checklist of what you own – property, stocks, gold, cash, bank balances, FDs, rental income, insurance, etc. Equally important, know what you need to pay – loans, potential expenditure, etc. Your assets should pay for your liabilities and cover your future expenses.
Thinking that health insurance is no more a requirement – In fact, it is all the more critical now. As you grow old, you and your spouse may need higher coverage. Avoid running out of sufficient cover - update your health insurance to save yourself from losing your savings in case of sickness.
Losing track of your investments – Make an annual visit to your attorney to review your will. Keep track of existing investments through your advisor, to see if they still match your financial goals.
Closing EMIs randomly – If you are still paying one or more EMIs when you approach retirement age, you need to assess which ones to close first – the ones incurring highest interest rate need to go first.
Retiring much earlier than you should have – Were you even ready to retire or would you have liked to work longer? Did you still need to bring in the bread and butter? Setting up a base for options like consulting or taking up alternative paying careers is a good way to ensure that you retire comfortably – mentally and financially.
Have we missed anything here? Do write in to share how you have made your money work for you in your retirement.
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