In the form of a global pandemic, life has enforced a new normal for us. While we are all worried about our surroundings and the problems persist now, are we probably thinking about the future? With the current employment scenario, are we planning enough for our retirement tomorrow?
Here are a few things you might want to avoid in your retirement planning:
1. Avoid taking out new loans.
In these tough times due to the global pandemic, economies are marred by job losses, wage cuts and inflation. Many upcoming job offers were lifted and people reported massive pay cuts due to the transition to working from home. When we take into account the uncertainty in employment, it would be wise to stop your vehicle or your housing plans at least until the pandemic sees a conclusion. You should avoid debt in your books when the sources of income are slippery.
2. Avoid investing your savings in the stock markets from now on.
Markets have had constant fluctuations due to the effects of the virus. The industries that were shut down due to shutdowns and disruptions in the supply chain have either closed permanently or are struggling to stay afloat. Although there are some sectors that have witnessed some upward movement. The overall market sentiment seems to be bearish, ie. stock prices are volatile and it is not advisable to invest your pension fund in equity right now.
Avoid withdrawing your funds from safe securities such as PF and EPS considering your retirement years.
The other unprecedented effects of COVID-19 seen were the purchase of panic and the withdrawal of panic. People are panicking to see the sky-high prices of treatment with COVID-19 and are afraid of losing a loved one because of it. Therefore, as a precautionary measure, many have resorted to withdrawing their savings from safe deposits such as PF and EPS. This should be avoided unless absolutely necessary because it will result in a reduction of your retirement pension.
4. Avoid underutilizing RBI’s EMI facilitation.
The Reserve Bank of India (RBI) has reduced interest rates on most retail loans as part of the COVID-19 package. It gives you a chance to reduce your EMI payments for at least this period. Use your funds saved from these revised EMIs, and divert these savings to your pension fund.
Avoid unconfirmed advice and seek the help of professional investment advisers to determine your future planning.
Your financial planning while you work lays the foundation for your life after retirement. Do not go after hearing about investing your hard earned money and instead take the help of professionals from the investment field to make careful decisions for yourself.
Plan your future with our following retirement calculator based on your life goals and financial goals. Or you can also contact your financial advisor to help with that. There is plenty of data out there that can help you save money or plan your retirement. But what’s more “now” are the things to avoid in retirement planning to save money.
Mutual funds are subject to market risks. Read all scheme-related documents carefully.
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