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Importance of Retirement Planning

A structured retirement plan equips you to handle various factors such as surpluses, shortfalls and emergencies. Read the article to know more about importance of retirement planning.

  • 9,497 Views | Updated on: Jun 25, 2024

Young minds are generally more occupied with the newness of adulthood, exciting career avenues, budding relationships, and more. Among the host of things they wish to explore, retirement planning is not at the top of their priority list. However, our fast-paced world is full of uncertainties, and it goes by so quickly, leaving us with little or no chances to revive. Therefore, realising the importance of retirement planning is advisable to enjoy those golden years.

To make this process easier and straightforward, it is essential to know what is retirement planning. Read on to find the answer to this question and a few others, like “what is the main purpose of retirement planning?”.

Importance

What is Retirement Planning?

Retirement planning is a process whereby a person obtains a roadmap of their personal and financial life, which will help them meet all their living expenses post-retirement. Outlining for retirement assures an added source of income and assists in handling and managing life aspirations, medical emergencies, and being financially self-sufficient. Also, it serves best to understand the importance of retirement planning and start making arrangements for your retirement from the early stages.

Why is Retirement Planning Important?

Now that you understand retirement planning’s meaning, you must have realised that engaging in secure retirement planning is crucial to staying financially secure. A structured retirement annuity plan equips you to handle various factors such as surpluses, shortfalls and emergencies. So ultimately, a thorough retirement plan will let you develop a comprehensive understanding of your life goals (the aims) and define the path (the tools) to achieve the same. Here’s why you should start preparing early on rather than when it’s too late.

Why retirement planning is important.

  • Fulfil Retirement Goals

Retirement takes you to a new phase of your life wherein you can genuinely make time for yourself and indulge in activities that you have not been able to pay attention to during your work life. These can include picking up on an old hobby, actively working on your kids’ future, working on a venture you have been planning for years, etc.

  • Emergency Ready

Nobody can account for what is going to happen tomorrow. In such situations, it is best to stay prepared ahead of time, and retirement plans allow you to do exactly that. In addition, investing in one will ensure that you do not have to depend on anybody else financially in case of a medical or general emergency. The emergency fund will take care of that.

  • Maintain the Standard of Living

We all follow a particular lifestyle, and with age, it gets deeply incorporated into our daily habits. The lifestyle we lead today is because of the income we receive every month. Investing in a retirement plan is necessary to ensure this same standard of living post-retirement. That will help you with a steady income every month even after retiring.

  • Beating Inflation

Inflation can be defined as the rise in the price of goods & services, iInflation is increasing daily, and the effect of inflation, which seems to be small in the short term, can be huge over a few years. This means that an individual will have to pay more for all expenses in the future. Thus, while performing vital retirement planning, you can consider this determinant and generate a sufficient retirement fund for your future to live a peaceful life.

  • Zero Burden on Family

After your retirement, you shouldn’t depend on anyone, especially your relatives. Having a firm plan in your position will ensure that you don’t become a financial responsibility for those close to you. You want to be in a place where you are able to help a family member’s financial condition, “If needed”, not to make things adversarial. If you’ve planned consciously and kept a healthy amount loaded for retirement, you may have a lovely gift to give your children by adding to their wedding plans or grandchildren for their studies, gifts, etc., when your time comes.

In addition to these, you get tax benefits, reduced costs on investment plans, no financial obstacles for the future, and in the end, a stress-free life. Yet, with all these benefits and more, you can’t deny the fact that this is indeed a terrific investment opportunity to give up on.

That’s right — start today!. Now that you have understood the importance of retirement planning, you can begin by refining your smart retirement plan today.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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