The first thing that comes to our mind when we think about retirement is the freedom to do whatever we wish to. But it comes at a cost, quite literally. The key to a happy and peaceful post-retirement life is adequate financial planning. There are numerous ways to achieve this, but you must find out and invest in a plan only if it meets your requirements. Here are a few effective ways in which you can better prepare for your retirement expenses.

• List down your needs: Retirement can be an expensive affair. A recent study shows that you might need 70 to 90% of your salaried income to maintain your standard of living once you stop working. This amount can be managed only if you have adequate savings in your account. Factors like inflation and the economy can also have a direct effect on your post-retirement expenses.
• Invest in a retirement savings plan: Make sure you put some money into a retirement fund as soon as you start working. These plans have been structured with the sole purpose of helping you save up enough for your golden years. Additionally, they provide you with various options regarding how you would like to receive your returns. You can choose to get a monthly income or a lump sum payment.
• Purchase a ULIP Pension Plan: ULIP Pension Plans are long-term investment instruments that allow you to grow your money while also providing you with life cover. You can choose where you’d like to invest your money, based on your personal risk appetite, and save up enough for your retirement.
• Learn about the pension schemes available: There is nothing better than a government policy that offers a helping hand to secure your future finances. One such pension plan in India is the National Pension Scheme (NPS). Here’s a look at what is NPS and how it can help:
  • The minimum yearly contribution is Rs 6,000 which can be paid once or in instalments of Rs 500.
• Post-retirement, a certain percentage of the financial corpus can be withdrawn, whereas the remaining amount is sent monthly as your pension.
• Tax benefits can be availed under Section 80C and Section 80CCD of Income Tax Act, 1961.
• Keep your retirement savings separate: Once you start planning for your retirement, you need to ensure that you don’t dip into that money until you’re ready to leave the workforce. You should have a separate emergency fund and health insurance to help you deal with sudden financial emergencies, leaving your retirement nest egg untouched.

While these are just a few tips to guide you in the right direction, make sure you design a plan early in life. Once this is done, you can manage your finances during and post-retirement and enjoy its perks in your golden years.