The first thing which comes to mind when we think about retirement is how much money do we save? Do you really think having a retirement plan is all about saving money? If the answer is yes for then you are absolutely wrong. Having retired and having financial independence are two different things and cannot be related to each other.
Now let’s understand the difference between the two. Retirement is something which you either take voluntarily or you are been given based on your age. Once you retire you might be financially independent based on the retirement plan you choose or you may still not be having financial freedom and may be dealing with liabilities.
On the other hand, having financial independence means not to be dependent on your source of income for living your life and your investments do so for you. You can be financially independent post or pre-retirement too. There is no fixed age for it.
Today, due to an increased awareness about retirement planning and pension schemes, people are even having financial independence as early as in their 40s and then the work they do is solely based on their interest and not for earning a livelihood. They have made those decisions early in their career and chose the right investments which have given them this freedom.
Now let’s check best investment options which can ensure you are having the freedom and financial independence even post your retirement:
Referring to the any researches which are being carried out every day, in order to maintain the same lifestyle, an average earning individual needs to keep aside 11 times their annual salary as savings. This is not only required to lead the same lifestyle but is also required in order to ensure you are not dependent on your children or anybody for any health care related issues. Don’t worry if you do not have this much amount saved. With the ever increasing retirement options today, you can take the help of retirement calculator and start saving the required amount form today. You can also use the extra money you make to aid you in reaching your goal.
In order to develop a habit you need to have similar kind of surroundings. The most important things in order to reach your goal towards financial independence is the company you keep. It can be anyone, your spouse, family or friends. The kind of environment you are into will help you develop the same characteristics in yourself and will also ensure you are motivated in the journey. If your surroundings are also having the similar attitude not only will they support you with financial planning, they will also stop you from swaying.
The foundation stone for the future needs to be laid today, and to ensure you have a happy and hearty life post your retirement, you need to ensure you are healthy. Post retirement is the time which you will actually enjoy – be it with your kids or with your friends. You will be able to do things which you could not in the previous years due to work commitments. For you to be able to do so, you need to ensure the lifestyle you are having is healthy, as you do not want to spend your time and money post retirement in the hospitals or for buying medicines. Ensure all your health check-ups are in place from the beginning and even a minor ailment is looked after, which could later dig a big hole in your pocket.
Having financial independence post retirement requires a lot of planning and efforts at present. You not only need to prepare for it but you also need to anticipate the risks which could be associated along with it.
The risk should not only limited to your everyday activities but should also include any unexpected diseases, disability, divorce or separation. You need to be well prepared for these as these are the things which can take away your financial independence post retirement.
You need to ensure you either have some amount saved towards these or are having some kind of insurance in place to take care of these unexpected guests. Post retirement these should not be the things that should keep you up all night, rather it should be fun filled evenings with family and friends.
Don’t Sit Idle
Being financially independent does not mean you have to just sit at home and do nothing. It just means not to worry about money and do the things which make you happy.
We want to take retirement mostly for two reasons – we are done with the work we are doing or we have enough money which can sail us through. Post retirement is the perfect time to take up that hobby or that one thing which gives you that joy to wake up every day. It need not pay you but it should motivate you. Being able to work for something which you always wanted to but just could not due to all the priorities, can just be a starts towards your financial independence.
With so many investment options in place you need not worry about which one to look for. You can always start early and with the help of pension calculator figure out the amount needed post retirement. Instead of having one single investment, consider having multiple investment options ranging between various risks and the returns. Along with this, also have some fixed deposits in place so that post retirement you at least have some liquid money for those rainy days.
Financial independence does not only mean having not to worry about money, it also means now you can finally do what you always wanted to do without having to worry about the future. It is about having all those resources and also being able to help the needy without having to take anybody’s support.