Mahesh Pai lists out ways to plan one’s retirement in to be financially secure
Retirement is a phase of life that many of us look forward to, a time when we can finally enjoy the fruits of our labour and pursue the passions we’ve put on hold. It is a time for relaxation, exploration, and spending quality moments with family and friends. However, to make the most of your retirement, it’s crucial to navigate it wisely. 
- Avoid chasing high returns
Retirement is not the time for risky investments. Instead of chasing high returns, focus on preserving what you have. Prioritise safe investments over high-risk, high-reward options. Stay away from crypto currencies, high risky investments, trading, private lending for higher returns and highly volatile funds to maintain financial security. You are no longer in the wealth creation phase of life but rather living the wealth distribution, where you are living off the fruits of the wealth created by you. Don’t trade safety for the sake of returns.
- Beware of unethical financial advisors
When seeking financial advice, choose your advisor wisely. Bank representatives may not always have your best interests at heart. Look for advisors with integrity, competence, and a commitment to your financial well-being, and it is always better if you find such a consultant before you hit your retirement phase. Build a relationship of trust and ensure that financial products are chosen with your best interests in mind.
- Keep a budget for your child’s education
As parents, It is natural to want the best for your children, including a good education but these days schools/ colleges have become more of a status symbol that pushes parents into debt and overspending on your child’s education has become a lifestyle. However, dipping into your retirement savings to fund your child’s education can jeopardise your financial security.
- Investing retirement funds in real estate
It’s tempting to invest in real estate when you receive a significant sum of money. However, buying property with your retirement corpus may not be the wisest decision. Real estate investments can tie up your money and yield low returns. Unlike stocks or bonds, it can take time to sell a property and convert it into cash. If you need quick access to your retirement funds in an emergency, real estate investments may not provide the liquidity you require. Instead, consider more liquid and tax efficient investments that allow flexibility in managing your finances during retirement.
- Lack of equity in your portfolio
To ensure your retirement funds keep pace with inflation, it is essential to have some portion of your portfolio invested in equity. This can provide better long-term growth potential, helping to preserve your purchasing power. Your retirement portfolio must have equity investments along with fixed-return investments to improve your chances of reaching your retirement savings goal. This way you can get the best of both worlds – potentially inflation-beating returns of equity investments along with the guaranteed returns of fixed-return investments.
- Create a will
Having an open communication about your financial situation with your children can avoid potential misunderstandings and family disputes down the road. Discuss your plans and wishes so that they are better prepared when the time comes. Creating a will isn’t something that one does only when they are old, it can be done when they are young as well to protect their family and children. None of us really like to think about our mortality or the possibility of being unable to make decisions for ourselves but one needs to be prepared for the unthinkable.
- Have a sufficient medical insurance
Your health will probably be one of the highest expenses during your retirement, having sufficient health ensures financial security without burning a hole in the pocket. It will also allow you to enjoy your retirement without burdening yourself or your loved ones.
- Avoid complex investments
Retirement planning should be straightforward and easy to understand, especially for your spouse’s sake. Remember that women tend to outlive men, so ensure your financial plan is simple, clear, and manageable. Make sure your spouse has a stable income in your absence and can easily manage the financial arrangements you have put in place in your absence. In conclusion, retirement planning is more than just setting aside a certain amount of money. It involves making wise choices to secure your financial future and protect your loved ones. Avoiding these nine common mistakes can go a long way in ensuring a comfortable and stress-free retirement. Remember, a stable and secure retirement is within reach if you take the time to plan wisely and avoid these pitfalls. Your golden years should be a time of relaxation and enjoyment, not financial stress and uncertainty.
The writer is an investment consultant and business coach.
Email: mahesh@maheshpai.in
