Wednesday 21 April 2021

Real Retirement Mistakes


 Real Retirement Mistakes


For a working man, every day feels like one has so much to do that 24 hours a day seems too little. Life is made up of hundreds of thousands of moments. Some that move us, others that change is, and some that provoke us to action. Being busy takes away so many precious moments for us, so a working man waits for his retirement to enjoy life to the fullest. We all need to convert the retired life into golden years. When you don't have to get up in the morning and go to work 5 days a week. Going live in a place of your choice. Visit all those places, which you wanted to visit during your work life but couldn't do it for the want of time. Live life without bothering about outliving your money. This is the concept of good ideas many of you must be dreaming about. What does it convertible golden years in everybody's life? If statistics are to be believed, it's sad that unfortunately, over 95 percent of the people on earth do not enjoy their golden years. Golden years will remain in use you will remain only on paper.


Why does it happen, simple mistakes people make during the retired life off during the preparatory phase of all retired life? If you do a lot of these mistakes. You shouldn't be enjoying your golden years


Depending Only On Pensions

Inflation strikes hard on pension and savings. Your pension might not be sufficient to make the ends meet and your savings also might not be enough to help you in your hour of need. So you need to have some other source of income and not just rely on your fixed pension

Life Expectancy Has Increased; You Will Live For Long

Depending only on pensions for your cash needs during your retired life. Many people make this mistake. What's the problem in a pension is a great source of cash flow during that entire circle. There was a time people used to die within 5 to 10 years after the retirement years. Now live up to 85 to 98 years of age by design. Now imagine you depend only, let's assume that you are getting 50000 rupees pension every month. If you're getting a pension from a government, these pensions can be adjusted over time for inflation but if you bought a pension from pension companies at an insurance company. This is a fixer pension, this position will not change during your lifetime. 


Fixed pension loses its purchase value over the years

Now you will feel very happy at the beginning, as getting good. But because this pension doesn't increase with the rise in prices year after year. You are part using part of this cash flow diminishing and your living standard school start keep coming down. So depending only on pension for their cash flow needs he's asking for a reduction of your living standards year after year. Pension is always less than your salary so we need to manage it well. Not having enough retirement savings and having a fixed pension means you will have to find some income-generating employment after you retire.




Depending On Children for Cash Flow During Retirement

However rude it may sound, the parents who are too dependent on their children for money have been termed as ‘Financially Toxic Parents’. Sometimes parents make palatial houses for their children and plan lavish weddings for them only to dry up their savings. Such parents, later in life, can be taken up as a burden by their children. So being too dependent on your children for cash flow cannot be considered a wise option. Depending on your children for your cash needs. There was a time when also safety expected children to take care of us. That phase is far behind us now. Life of Our Children Is Different From Ours. Children hardly leave in a place with you live, they migrate to different parts of the world. They follow a different profession. Not many people do this mistake. For their children's education spent a lot of money. Sending the children to the most expensive colleges, schools, and universities. Whether it is right or wrong but the priority of your retirement planning is a much bigger product. Prioritize Retirement Planning Over Child Education Planning. In the pursuit of sending your children to good schools and colleges but compromise your preparations for your retired life that's not such a good idea. Our Children Will Have Genuine Difficulties. Please Do Not Depend On Your Children For Retirement Cash Needs


Exposing Your Retirement Money To Risk Of Loss

Investing means putting your money to work for you. If you make poor choices or if things go beyond your control, you could lose your retirement money. The parents of one of my friends lost a huge amount of their retirement money when they heard about a lucrative deal. Their tenant, who knew about them getting a big amount upon their retirement asked them to lend their money at a high rate of interest. They believed him only to be duped by him and losing all the money they had given him. During the retirement years, the retirees block the money in small financial institutions. Banks like the cooperative banks or cooperative societies, like small financial institutions or private money lenders. They come with extra risk. When they collapsed, if you've put all your money in such an institution, what happens is your retired life. Blocking all your money in these small institutions or giving it to the money lenders for the sake of higher returns. Parking in Small Financial Institutions for Higher Returns is not a good idea. Invest Your Retirement Corpus in Safe Places


Not Having Health Insurance

Health insurance is a way of paying for your medical bills and health care costs. Most people cannot pay for all their health care out of pocket. Health insurance can make it easier to pay your health care bills. Not having health insurance during your entire life. Many people do this mistake. There are not covered for all the health emergencies. They hesitate to buy during their working years but by the time they retired. The premiums will go so high up. In many cases, they have one of the other preexisting problems. On some preexisting diseases, the health insurance companies refused to give them a health insurance policy. 

All need to have health insurance at the beginning of life. Buy Your Health Insurance Latest By 45 Years. Treat Premiums You Pay As EMI On Hospital Bills You Pay In Future


Buying Properties Using Retirement Corpus

Real estate in India is not a profitable investment in present times. For every property you own, you need to pay taxes so it requires time and energy. The real estate industry went through many changes in the last couple of years. Demonetization in 2016 led to a fall in sales of real estate. In 2017, GST was implemented which led to some destabilization in the supply and demand of real estate. It can be double trouble for any retired person as he might not be able to find buyers for their property later on which can be a huge setback for him. They get a large lump sum amount of money at the end of service benefit. They use this money to buy some property. If you're purchasing a property for the sake of rent, remember that residential properties are just about 2 percent that's below the bank interest rates. Residential Rental Yield Is Too Low.


There is one other downside to buying the properties. The properties we lock up a big amount of money. You May Find It Difficult To Sell the Property plus maintenance Costs for Property 


Not knowing Tax Benefits

The government offers special income tax benefits for senior citizens to relieve them from stress at this phase of life. Senior citizens enjoy a higher exemption limit as compared to non-senior taxpayer citizens. The deduction allowed under 80D for payment of medical insurance premium is Rs 25000 for non-senior citizens. However, this deduction increases to Rs 50000 for senior citizens. For senior and super senior citizens, there are many tax benefits. But not knowing some basics of tax planning make them lose their money. Like some TDS are deducted, and in India, there’s no income tax up to 5 lakh rupees but only if you file an Income Tax return.  


Staying In Isolated Places


Stay Closer To Community Where Someone Can Help You.

In old age, staying in isolated places can have psychological effects too. In old age, one can take advantage of home delivery of daily needs items. But if they stay in isolated places, they cannot take advantage of these facilities. Pickup houses which are far away from the main city. Demand going up to stay in a farmhouse. They make a good stay in remote villages. There is nobody around them, nobody's there to help if they are in isolated places. You Need Help Of Younger Generation During Old Age.

People are tired of the cities and for the sake of that ready spend entire life in isolated places. But it will come with a set of problems. India is a country where safety is the real issue. Older people are being attacked.

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