Retirement planning made simple: A pathway to secure your future

As you approach retirement, focusing on effective retirement planning is essential for a secure future. With several responsibilities, such as maintaining your lifestyle, managing healthcare costs, and securing stable income streams, the right financial strategy can bring peace of mind.

In India, retirement planning is becoming increasingly important as life expectancy rises and families become more nuclear. Whether you’re nearing retirement or already retired, it’s crucial to prioritise financial necessities to avoid running out of funds during your golden years. Here are some tips to get you on the right track.

Prioritise essential living expenses
 

The first step in your retirement planning journey should be to ensure that your basic needs are met. This includes housing, healthcare, and daily living expenses.

1. Housing –

Make sure your home is paid off or you live in affordable accommodation. If you’re renting, budget for potential rent increases over time.

2. Healthcare–

Medical costs tend to rise as we age, making investing in comprehensive health insurance vital. Consider any regular medication, medical check-ups, or future surgeries your insurance may need to cover

3. Daily living

Includes groceries, utilities, transportation, and any other recurring expenses. Factor in inflation and rising costs in your retirement planning to avoid falling short

4. Debt repayment


Ensure any remaining debts, such as home loans or credit cards, are either paid off or managed efficiently. Debt can eat into your retirement savings quickly if left unchecked.

Focusing on these critical areas ensures your financial base remains stable.

Build an emergency fund

No matter how well you plan, unexpected expenses are inevitable. A well-maintained emergency fund is an essential component of the retirement plan. Here are the types of emergencies that you should plan for –

1. Unexpected medical emergencies –

Even with insurance, out-of-pocket medical costs can arise.

2. Household repairs –

Your home may require significant repairs or renovations as time goes on.

3. Support for family –

Unexpected financial support requests from children or grandchildren can sometimes be a burden. Ensure your emergency fund covers these situations without derailing your overall plan.

4. Major purchases –

While you might not plan for it, big-ticket expenses like replacing a car or home appliance could arise. Having a separate fund ensures you’re prepared for such unexpected needs.

If you’re wondering how to plan for retirement in India, creating an emergency fund is an important step as it provides a crucial safety net. To manage all of these expenses, consider maintaining a fund that covers at least six months of expenses.

Allocate funds for leisure and lifestyle
 

Retirement is about enjoying life, not just covering expenses. As a part of your retirement plan, set aside funds to enjoy your hobbies, travel, or other lifestyle activities.

1. Travel –

Keep a portion of your retirement funds for trips to explore new places or visit family without depleting long-term savings.

2. Hobbies and entertainment –

Allocate some of your funds for personal interests, such as gardening, music, or dining out.

3. Gifts and planned family expenses –

Many Indian retirees finance their children's or grandchildren's education or special occasions. If you plan to do so, it's essential to budget carefully and invest accordingly.

4. Health and wellness –

Don’t overlook spending on wellness activities like yoga classes or gym memberships that can contribute to a healthier, more fulfilling retirement.

5. Social and cultural activities –

If you enjoy going to the theatre, joining a club, or attending community events, budget for these activities as well. They can add joy and purpose to your retirement without putting financial strain on other necessities.

Balancing enjoyment with security is key to making the retirement plan sustainable.

Choose low-risk investments to ensure a steady income
 

Securing a steady, reliable income post-retirement is the main goal of retirement planning. While younger investors may take risks, retirees should prioritise preserving and growing capital with low-risk investment options.

One of the best choices for risk-averse individuals is a fixed deposit (FD). Investing in FDs has plenty of benefits –

1. Safety and security –

FDs are considered a safe investment, as market fluctuations do not affect them. This makes them ideal for protecting your capital.

2. Regular income –

Some FDs allow for monthly interest payouts, providing a consistent income stream for daily living expenses.

3. Liquidity through FD laddering –

By spreading investments across FDs with different maturity dates, you ensure access to funds at regular intervals while maximising long-term returns.

4. Diversification –

Since FDs are low-risk, your funds will remain secure no matter what. Hence, you can choose to diversify with a balance of medium to high-risk investments, knowing your portfolio is well-protected.

5. Tax efficiency –

Investing in a tax-saving FD (with a 5-year lock-in period) under Section 80C can help reduce your tax liability. This is integral to knowing how to plan for retirement in India.

While FDs are low-risk, it’s wise to diversify across other low-risk instruments, such as government bonds or savings schemes, to further protect your portfolio. Remember that, in India, the best retirement plan is a combination of FDs and other conservative investments. This helps to protect your principal while earning a steady return.

Why an IDFC FIRST Bank Fixed Deposit is ideal for retirement
 

When choosing an FD for your retirement, IDFC FIRST Bank stands out with its customer-friendly features designed to meet the specific needs of retirees. These FDs offer competitive interest rates, flexibility, and added security, making them an excellent choice for conservative investors who want to grow and protect their savings during retirement.

Here are some key advantages of IDFC FIRST Bank Fixed Deposits –

1. Attractive interest rates –

IDFC FIRST Bank offers up to 7.50% interest per annum, with an additional 0.5% p.a. interest for senior citizens. This helps your savings grow substantially without taking on unnecessary risk.

2. Flexible tenure options –

You can choose from tenures ranging from 7 days to 10 years, allowing you to tailor the deposit period to your financial goals. Whether you need funds sooner or later, there's a tenure that fits your plan.

3. Loan against FD –

IDFC FIRST Bank offers an overdraft facility on select FDs, ensuring you can access additional funds in emergencies without breaking the FD.

4. Partial withdrawals –

If you need to access a portion of your existing funds during an emergency, the partial withdrawal option allows you to do so without affecting the rest of your deposit.

5. Auto-renewal feature –

With auto-renewal, your FD continues earning interest without requiring manual intervention, helping grow your retirement corpus seamlessly.

By incorporating these customer-centric features, IDFC FIRST Bank Fixed Deposits provide a perfect balance of security, income, and flexibility.

Conclusion
 

Retirement planning is essential to ensuring a secure and fulfilling post-retirement life. From covering basic living expenses to building emergency funds and balancing lifestyle spending with long-term savings, careful financial planning can help you navigate retirement comfortably. In India, the best retirement plan is one which focuses on low-risk investment options like fixed deposits that provide a reliable income stream and ensure your principal remains protected.

For a secure and stable financial foundation, consider the IDFC FIRST Bank Fixed Deposit as part of your retirement strategy. With attractive interest rates, flexible tenures, and safety, it offers everything you need to meet your financial goals during retirement. Apply today to keep your future safe and secure!