Planning for post-retirement income is crucial to maintaining your lifestyle, covering medical expenses, and meeting unexpected financial needs without stress. A solid retirement plan is necessary as it helps you provide financial security during your golden years.
How to Plan for Post-Retirement Income
- Create multiple income sources
Invest in multiple sources instead of just relying on a pension or EPF. Once you’ve saved enough, consider buying a property and renting it out. The rental income can provide a steady cash flow during your retirement years. And with time, its value will also increase while keeping you financially stable.
- Invest in multiple sources
Do not invest all of your funds in one place. Having a variety of investments that include fixed income, equity, debt, and real estate helps lower risk. This means if any one of your investments underperforms, the others can help compensate for the loss.
- Annuity Plans
Annuity plans are financial instruments that give you a consistent income for the rest of your life or for a predetermined amount of time, usually after retirement. This is a kind of insurance in which you invest a lump sum amount or pay in instalments for a specified period. And in return, you will get guaranteed income, which can either be paid immediately or after a specified period.
- Build Emergency Fund
From your initial years, you must start keeping aside a separate savings account for unforeseen expenses. Having an emergency fund guarantees that in an emergency, you won’t have to deplete your retirement funds or sell long-term investments. This money should ideally be sufficient to cover essential costs for at least six to 12 months.
- Invest in government-backed retirement schemes
The government has launched various schemes for people that will benefit them after retirement. Some of these include Employees Provident Fund (EPF), National Pension System, Pradhan Mantri Vaya Vandana Yojana (PMVVY), Atal Pension Yojana (APY) and Senior Citizens Savings Scheme (SCSS).
Conclusion
Planning a post-retirement income will not only benefit you financially but also make your golden years stress-free. A stable income flow during retirement can be achieved by diversifying your investments, establishing several sources of income, accumulating an emergency fund, and utilising government-sponsored programs and annuity plans.
