Planning for retirement? Here's what you are most likely to spend on

You may think your retirement is far away, and it is not something you need to worry about now. But you will be surprised to know that many young people in their early 30s have already started planning for retirement. You must start planning for the perfect golden years as early as possible. 

The first question that will come to your mind is how much you need to save to be financially independent and make the best of your retirement years. Before you get into it, you first need to know where you are most likely to spend after retirement. 

Here are some of the major expense heads to consider.

Healthcare

As you grow older, healthcare will become one of your top priorities and an integral part of your retirement planning process. From routine check-ups and daily medicines to hospitalisation, you will have to plan well to get the best possible medical attention in your golden years. To ensure the majority of your healthcare costs are taken care of, you must get health insurance. Starting early is the best way to ensure comprehensive coverage and cost-effective premiums when you are older.

Day-to-day expenses

When calculating how much money you will need after retirement, it is essential to factor in your day-to-day expenses. This includes groceries, shopping, local travel, salaries for help, eating out, socialising with friends and family members, etc. Remember that you will have to account for inflation when figuring out what your everyday expenses will be 20 or 30 years down the line. While there is no definite way to calculate inflation, you can average about a 7% yearly increase.

Utilities

As an extension to the above point, you will spend substantially on utilities. These include electricity bills, water bills, gas bills, internet, OTT subscriptions, and fuel for your car, among other things. Utilities already eat into our earnings today. Moreover, as technologies evolve, bringing in electronic cars and other inventions we don't know about, your utility usage will keep increasing. Therefore, you must plan for your utility expenditure in the future as these will only keep getting more expensive.

Travel

Your retirement life will be the perfect time to see the world. You can do exactly what you want without familial, work and social obligations. Whether it is exploring Europe, taking a month-long cruise or exploring undiscovered places of beautiful India, you will be able to do all your heart desires. It is hence crucial that you save for travel proactively. You can create a separate travel fund to pay for all your adventures. 

Fitness

Your health is your wealth. You will hence have to invest in it after retirement. You will have to spend on gym memberships, private trainers, yoga sessions, physiotherapy, and more. Fitness also means eating right, which means spending on organic fruits and vegetables, including high protein foods in your diet, and eating superfoods such as nuts, berries, etc. Fitness should become your priority in your retirement; hence, you must plan for all the associated expenditures.

Hobbies

You can look forward to doing things that are just for you and make you happy. From wildlife photography to pottery, gardening and dancing, you may have hobbies and interests that you don't get time for now. Whether it is work pressure, giving priority to your kids, or something else. To ensure you can spend money on your hobbies in the future, create a savings plan for it today. 

Relocation

Do you want to escape the city life's hustle and bustle after retirement? This is a big personal and financial decision to take into account. Moving to a smaller town or a picturesque beach location is idyllic and prudent as your living cost will come down substantially. If you decide to do this, you will have to consider the cost of relocation, rent and to set up your life in a new place.

Charities

Retirement is the time to do it if you want to pay it forward! Your retirement presents the perfect opportunity to give back to society in terms of your time and financial help. You could associate with NGOs or even start your own charity. To help others, you have to factor it into your retirement planning. You can do this by keeping some money aside periodically that will compound over the years and offer you a healthy corpus to do good.

Plan effectively for your retirement

In addition to the expenses listed above, many other unexpected costs may pop up along the way. The best way to secure a comfortable and stress-free retirement is to create a separate investment portfolio for your golden years. IDFC FIRST Bank can help you get started on the right foot. 

Through the IDFC FIRST Bank mobile app or with the assistance of your relationship manager, select from the best mutual funds and set up auto debit for SIPs that will allow your investments to compound over the years and secure various retirement milestones. Simultaneously, use fixed income instruments such as bank deposits to stabilise your portfolio.

Additionally, take advantage of IDFC FIRST Bank's lucrative interest rates on savings account for a balanced investment approach.

Retirement is not a goal but rather the beginning of a new journey, and IDFC FIRST Bank is just the financial partner you need to make it fulfilling and memorable! 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.