People usually begin the new year with resolutions, but very few carry it to their logical end. However, this shouldn’t deter you from making New Year resolutions or setting goals for yourself if you have not been able to fulfill them till now. Remember, that every small step taken towards your goal will help you fulfill your resolution and eventually help you reach your goal. Let’s understand how can we make Financial Resolutions For Retirement and our security.
So, besides making resolutions like staying fit by enrolling at a gym, reading books, not eating junk food, and so on, this year, also make some financial resolutions so that your assets grow, and liabilities reduce as much as possible, and you can create a corpus that can help you retire comfortably.
So, here are three easy financial resolutions you to start with this new year.
Educate Yourself: The young usually seek guidance from their family for investment when they start earning. However, the older generation may not know all financial instruments or may not feel at ease with them. The financial space has changed a lot in the last 2-3 decades, and instruments, such as fixed deposits, recurring deposits, and so on, preferred by the elderly, may not be the best ones now.
There are now various financial instruments, such as sovereign gold bonds, Mahila Samman Certificate, small finance bank fixed deposits (FDs), corporate FDs, government bonds, and a plethora of equity mutual fund schemes that you could explore depending on your risk appetite.
So, resolve to educate yourself this year, and don’t just think of saving money, but rather investing it instruments where it can grow.
Start Planning Early: Retirement is a long-term plan and needs to be changed from time to time in different phases of life, when one is young, in mid-age, and nearing retirement.
According to financial experts, an early start can give your investment momentum because of the power of compounding. Compounding brings snowball effects to your investment, and over the years, the money invested generates more money. The only requirement is to start investing early in your career.
Further, one has a higher risk-taking capacity at a young age and can invest a higher portion of the portfolio in equity, which may generate huge returns but needs a longer period to grow. This is not to say that the returns are guaranteed. Equity is always risky, but typically one has fewer liabilities at a young age, and can, therefore, invest in equity.
If you have not started planning yet, don’t delay investing anymore.
Get Sufficient Insurance: While planning for saving and investment, also cover the risk associated with your assets, which are costly, and cannot be recovered.
To start with, get insurance for your important assets – ‘your life’ and ‘health’, and then your family’s ‘health’. Many people think of getting life insurance when they have dependents and health insurance in their mid-age, or when they are nearing retirement. However, a risk cover taken at an early age means less cost (lower premium) and more benefits, such as coverage of pre-existing diseases by the time one reaches the stage of life where one might need to use those covers.
So, get adequate insurance coverage for life and health this year to safeguard yourself from burning your pocket in case of any eventuality.
Besides this, review your expenses, savings, and investments at regular intervals, say, every quarter or six months or at your preferred frequency to ensure that the long-term retirement planning and savings remain on track.