When a person is termed as a senior citizen, it implies that he/she has reached the age of 60 and retired. For a hard-working employee, the word retirement is music to the ear which on one hand is a good thing, but it can soon change into a nightmare if he/she didn’t make up a financial or retirement plan. Many people don't understand the importance of this, but the results of financial planning can prove to be fruitful. Thus every individual who is willing to have financial independence and a pleasant retired life should know the importance of financial planning.

WHAT IS FINANCIAL OR RETIREMENT PLANNING?

All the private employees and most of the government employees nowadays don’t have a pension scheme to support their retirement life. So it is crucial for them to set up a source of income before they retire, or at least sign up for a pension scheme that their bank provides. This process of planning for a source of income after one’s retirement is called financial planning. Surveys quote that anyone would need to replenish 70-90% of their pre-retirement income to have a peaceful retirement life with the same standard of life as before. 

NECESSITY OF FINANCIAL PLANNING:

It is true that your savings would be sufficient enough to lead a happy life, but in a worst-case scenario, no one knows about what kind of emergency we will be facing in the next second, the truth is that there is no guarantee that life goes on as smoothly as we planned. So it is also important for us to plan, keeping in mind the worst-case scenario. By having a retirement plan set up, you can have a stress free healthy life, as you need not worry about your income. 

By having a retirement plan set up, you will have no reason to worry about being a burden to any other family member, and you can be in a stage where you can still support them whenever they are in need. And you don’t need to be dependent upon others and you can still make your own decisions without asking permission from others. In a state of having a medical emergency, with a perfect retirement plan, you can stop worrying about your capital support and can concentrate on taking care of your health.

HOW TO DO RETIREMENT PLANNING?

If you are in your 30’s, then this is the right time to start with your retirement planning. If not, then it’s not too late to start now. In order to start with your retirement planning, it’s important to set your retirement goals. Make three sets for short, medium, and long term goals. 

After doing that, get started with assessing your current financial status, which will help you have a clear vision of the path you are traveling in. To get your retirement planning to work, you have to start saving from now. Open up a savings bank account and start depositing a part of your income every month, and try not to rely on your savings until your retirement. This will help you by adding interests to your savings every year, which is a major advantage. This will leave you with a huge sum of savings when you retire.

One of the best backups other than savings and investment is signing up for the retirement plans that are provided by your banks. These plans are designed in a way that you will not be paid in whole but will be paid by small sums at frequent intervals. These plans have many options to back you up when you are in need. Contact your bank to know more about their plans. There are also few government-organized pension schemes like the Varishtha pension bima yojana, Pradhan Mantri Vaya Vandana Yojana, etc. which are very useful for senior citizens.