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Never too late to plan

Never too late to plan

In an ideal world, you will be all set with a retirement plan by the time you’re 30. But most of us start thinking of retirement after we turn 40 or even later. Here’s what you can do.

Are you just thinking of starting a retirement plan when you’re 50? Look around you, and chances are that your colleagues are beefing up existing plans. If you don’t have your plan in place by now, you might have to seriously consider postponing your retirement, or compromising on your standard of living post retirement. Some late starters simply decide to quit and take up a secondary job, which will give them a regular income but will not be as stressful or time-consuming as their current career.

The half-century mark
By the time you’re in your 50s, the kids have probably left the nest and are supporting themselves. It is likely that you are enjoying the highest income level of your career. It's not uncommon for people in their 50s to be planning overseas travel and looking at growing their investment portfolio. Everyone over 50 should also be actively planning their retirement.

Now is the time to focus on building and tweaking with retirement assets. To take stock of how you have done so far on planning for your retirement. If you are servicing any debts; this is the best time to retire them and have no financial liabilities. Make sure that you have also looked into the possibility of taking opinion on estate planning and adequately insured your health. Look at creating ladder deposits that will pay out in a few years.

Sixty plus
Life in your 60s should be all about enjoying what you have and looking forward to an even better few decades to come. If you are in your 60s, you are away from active employment. But if you have inadequately planned and don’t have enough for your dream retirement, there's no need to panic just yet. With some smart (but possibly higher-risk) ventures, you can get back on track and still enjoy the life you've spent so many years building.

Whether you have retired, or are in semi-retired state or still working full-time, this is a phase where you should be ideally living off your investments and savings. And if you want to help your grandchildren or children financially, you need to get an estate plan in place. You may even be considering downsizing your home to make sure your money lasts for a long time, and to support your lifestyle choices or to take care of rising healthcare and living costs.

Make sure that your portfolio is still diversified. Heaping all your savings in one asset category or in one instrument type not only increases your risk but you also lose out on other high-return or more tax-efficient investment options. Follow asset allocation according to your age and risk profile. To get a good mix of equity and debt, look at specific investments within these two categories.

In your early 60s, make sure you insure your assets, as replacing them in retirement when income streams are limited is more expensive.

In case of a bad year at the bourses, you need not withdraw your investments unless it’s an emergency; stock markets are known to turn around within 18-24 months.

Finally, you have worked hard to save for retirement, so spend time and money judiciously. Plan well and carefully and you can enjoy your sunset years without a care in the world.

Published on: Nov 04, 2009, 3:41 PM IST
Posted by: AtMigration, Nov 04, 2009, 3:41 PM IST