InveStree: How Can Women Plan Their Retirement?

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Surveys have shown that, while some Indian women have their pulse on investment for their retirement, a majority of Indian women do not financially plan for their retirement. An alarming 58% of Indian women, as displayed by the results of one survey, did not plan for a post-retirement income. Whether you are married or unmarried, it is worthwhile to plan for your retirement and start investing as early as possible. 

Why Should Women Plan For Retirement?

Planning for post-retirement involves investing your capital while you are still working and gradually building a corpus that boosts your other income sources. If you are wondering why women should plan for their post-retirement at all, then here are some valid reasons: 

  • Long Life Span

Based on research, women live longer than men and may require more capital than men need as a result. 

  • Breaks in Careers

Women are forced to take breaks in their careers, and these may be unintentional, for instance, maternity leave and family care breaks. Such breaks create gaps in earning and saving, especially as they apply to saving and building wealth for the future. 

  • Gender-Based Pay Gaps

This is a rather unfortunate truth, but women earn less of an income than men for doing the same work. There is a significant disparity in pay scales according to gender, and this creates less savings for women. As women get older, this gap only tends to widen. As a result of this, your savings may amount to less than that of men doing the same work as you.

How Women Should Plan For Retirement

Building a robust corpus is essential for your retirement, as you may have gauged from the reasons mentioned. Creating a corpus for retirement involves some degree of financial planning and goal-setting. Here are the key ways by which to make your retirement financial plan: 

  • Determine Your Requirements for Retirement

When you are engaged in financial planning, deciding on your needs is more important than focusing on your wants. Needs and requirements are essential while wants may be considered non-essential. While planning your retirement expenses, consider what amount you will be required to spend every month on your needs. This will largely be dependent on your current lifestyle, your health, and specific post-retirement plans. While making retirement plans, consider the cost of help, medications, healthcare, etc. 

  • Consider Inflation

Inflation is a reality that people have to face during their earning years and more so during retirement as individuals cease to earn a regular income from work life. The purchasing power you enjoy today will be reduced by the time you reach retirement. You can use efficient online retirement calculators to compute the money you will need for retirement and these will help you to make decisions about your investment options in the present day. 

You may even consider using the services of a professional financial advisor who can advise you on sums you will need for retirement and offer you investment options with positive returns for the same. 

Investment Options for Post-Retirement

In case you are wondering what options you may have at your disposal for generating a post-retirement income, you can consider the ones below. It is important to note that planning and investing early in your career gives you more time and possibly higher returns so think of these investments seriously: 

  • Fixed Deposits

Tried and tested and risk-free, fixed deposits may offer you low returns, but they are steady income earners and give you returns over long periods. 

  • Dividend-Yield Stocks

If you invest in stocks of companies that pay high dividends on a regular basis, this acts as a passive income source. The dividend payouts can be used to re-invest your capital and build your wealth over time. 

  • Mutual Funds

Mutual funds have become a popular way to invest in the stock market, and they minimise your risk in investment. In a mutual fund, the capital of several investors is pooled in an equity, debt, or hybrid fund, and the returns are earned accordingly. What’s more, if you invest in a mutual fund with an SWP or Systematic Withdrawal Plan, you can withdraw your amounts earned at regular intervals without liquidating your entire investment in a mutual fund. 

  • Income from Rent

In case you have property, you can earn a potentially good passive income from leasing it. This gives you a stable income source and rental contracts can be renewed. Additionally, rental income is prone to rising with each new rental contract you sign, as real estate regularly appreciates as an asset. 

  • National Pension Scheme (NPS)

This is a steady source of income if you apply for it at a young age. It can give you a substantial corpus by the time you retire. From NPS, you typically get 9% to 12% yearly returns collected over a long period, and this can amount to a significant sum to hedge against inflation. You also get tax deductions if you invest in this scheme. 

Be Retirement Ready

Retirement is a period in which people should be enjoying themselves and relaxing after a life of hard work. This is not the time when you should be under any stress, least of all financial stress. However, if women do not financially plan for retirement, they could find themselves being a burden on others, like their children, and this is something no woman (or man) may want. The best way to plan for your retirement is to invest in wealth-creating instruments while you are young.

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