When you think about retirement, what comes to your mind?
Do you see yourself going on a holiday to your dream city or you are at your workstation, working late hours because you can’t afford to retire yet?
Most of us have not given a thought to our retirement or we feel that things will fall into place if we just go with the flow. While this strategy might work for a few but everyone is not that lucky. Following are few myths that could be acting as hurdles to our secured future.
Myth 1: Expenses will come down once I retire
This is a scenario which all of us desire, however it is quite unlikely. People tend to spend more when they have free time. There might be places that you wanted to see but due to work, you couldn’t travel much. There might be social events that earlier you could dodge due to busy schedules but post retirement you might not be able to do so. Even if we don’t come across these situations, all of us would like to maintain our current lifestyle. With a stop on your major source of income, how would you meet your expenses?
Myth 2: Savings today will be enough in future as well
Most of us feel that we will be able to survive on our existing savings corpus. What we tend to ignore is the impact of inflation. The necessities/luxuries of today will get dearer in future, while our current level of savings may not be sufficient to cover those expenses. Also, there might be some unforeseen expenses that we will have to take care of. While planning for retirement it is important to take the impact of inflation into consideration and also account for contingencies.
Myth 3: Mediclaim will be enough to meet medical expenses
Medical expenses would probably be the biggest future expense. Mediclaim does not guarantee full coverage of health care costs. It will help to reduce the burden to a great extent but who knows how expensive health care will get some years down the line and whether current coverage will be sustainable in future as well.
Myth 4: Too young to plan retirement
We tend to procrastinate planning for retirement. We feel we have enough time in hand to save for the future. However, that is not the case. As you near the age of retirement, it gets difficult to build the corpus that you will need to sustain the post-retirement days. To avoid such situations, one should start investing from an early age. Charting down a financial plan will give you an idea how much you will have to invest today, to enjoy the perks in future.
Myth 5: My family will support me
The social system in India is changing. Gone are the days when we used to live in joint families and support one another in need. You will find most of the families adopting the nuclear way of living. And people who are used to living an independent and self-sufficient life, relying on others doesn’t come easily to them.