5 common mistakes while planning for retirement

As you grow older, the needs of being financially independent grow more strong. Through every life stage – young employee, wife, mother – you may have adequate control of your finances, but in retirement with no money coming in, it's important to plan well to be financially independent.

As you begin the process of planning about your retirement, remember not to make these blunders:

1] Planning for the sake of planning

The “In thing” now is , retire early and begin your little bakery or any other venture. As some look to retire before they are 50 from regular jobs, they lack a concrete plan. If you plan to retire early, you need to ensure your savings can at the minimum give you 20 to 25 percent of your last salary. So, plan wisely. You need to also keep in mind education costs, medical expenses and utility costs, before you begin your venture.

2] Not evaluating life expectancy

You can run 5 km under 30 mins currently, but do you think you will be able to do the same when you are older? Things which seemed simple now, will hold a lot of question marks later. Medical expenses, bills, unexpected gifts, the list of expenses grow. All of this with no income coming in. You may be young, but that doesn’t mean your necessities will not change. Most of the time, young investors look at retirement at the beginning of retirement and not the long haul.

3] Not thinking about Inflation

So often is the case, we don’t take into account the unknown. It is for this reason very often investors do not consider the impact of inflation on their savings and investments. A present for your husband like a watch would cost Rs 1 lakh, but in a couple of years it could rise to Rs 2 lakh. Thus, while calculating your future, it is imperative to take into account the effects of inflation or else expect bumpy roads in your retirement journey.

4] Purchasing a number of policies

You may take pride in the fact that they have purchased 20 or even more insurance policies for your retirement. But you forget, its about making the right investment choices. Being a policy hoarder doesn’t ensure a happy and safe retirement. Even as you retire, do get yourself insurance policies (preferably when you are younger) to protect, safeguard your future, as well your loved ones.

5] Insufficient health coverage

The most common diseases women suffer when they grow older are forms of cancers like breast cancer, ovarian, cervical cancer and pregnancy related issues. Thus, you need to prepare for the extra expenses and have adequate health insurance cover to protect your needs. There are insurance companies that provide adequate health insurance coverage. So get yourself a health coverage to manage medical expenses in retirement.