A little deviation from your retirement plan and actual retirement needs can create huge financial trouble. So, it’s better to be careful when you start planning for your retirement. Several factors can impact if you are planning to retire, but let’s focus on the 5 important questions here that you need to ask yourself before you start planning for retirement.

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How Many Years Do You Have To Retire?

Whenever you start thinking about your retirement, you need to clearly set the target age when you want to say goodbye to your work life. While setting the target for appropriate retirement age, you may consider the aspects like fulfilling your duties towards your dependent family members, accumulating sufficient corpus, having your own home, becoming debt free, and so on.

How Much Corpus Will You Need For A Happy Retirement Life?

Ask yourself what type of lifestyle you expect during your retirement. What would be your various retirement-related financial goals? How much monthly flow of income would be sufficient to meet your expenses? The answer to this question will help you in estimating the size of the corpus that you would require for a comfortable retirement life.

Where To Invest To Get The Desired Retirement Corpus?

Once you have estimated your retirement corpus size, it’s time to figure out ways to build that corpus. Ask yourself how much money you will be able to invest in building the retirement corpus and where to invest to get the desired return. These questions will help you identify the appropriate investment instruments that can give your adequate return to build the required corpus for your retirement.

How To Minimize The Risk?

While working towards your retirement goal, you may come across various risks; it would be important to mitigate them. You may ask this question yourself, how to minimize the risks? You can reduce the risk by getting appropriate insurance products and by maintaining an adequate size of contingency funds all the time. For example, by getting health insurance cover, you can lower the financial risk due to medical emergencies.

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How Will You Manage The Debt?

You may need to borrow money to accomplish some of your financial goals. So, ask a question to yourself, how will you manage the debt? You may not want to step into your retirement with debt on your head. So, it’s better to repay the debt well before your retirement. While managing debt, you must ensure to maintain a high credit score and an impeccable credit history. It will help you get a loan during a financial emergency in your retirement period.

Finally

Along with the right planning, you also need the right execution. It’s important to review your retirement plan from time to time and make the necessary changes with changes in market conditions and with changes in your retirement expectations.

The author is an independent financial journalist.