Gone are the days when people worked till the age of 60-65, often staying in the same company for decades. By the time they retired from work, they were too old to enjoy their well-earned leisure time!
In today’s fast-paced world, people are not ready to wait till they turn into senior citizens to enjoy their leisure. After working 10-12 hours daily for a couple of decades, slow burn-out sets in. The body and mind are tired of the same gruelling routine. There is an urge to pursue alternate interests, travel around the world, live their life at a slow and relaxed pace. But the one factor that acts as a deterrent is their financial position.
Popularly known as the mid-life crisis, people in their 40s often have second thoughts about their profession, career path and the way their life is progressing. A lot of them would love to give up on their jobs and take up early retirement. The goal is to retire from work, not from life. With all the free time available, one can pursue a long forgotten dream such as pursuing music, sports, social service, teaching, world tours, religious pilgrimage. The options are endless.
However, with life expectancy increasing continuously, the post-retirement years are also going to be several decades. So if one retires at 45-50, how does he live a financially secure and stable life till the age of 80-85 years Because unless the future is secured, it is not possible to focus on other pursuits.
Thankfully, with careful and systematic planning, it is possible to ensure a steady income even in the long term. The planning has to be on dual fronts – expenditure control and investment options. Keeping in mind the following pointers will help in planning for early retirement.
1.The time to start acting is now – The execution plan to secure your finances has to be put in place at least 2-3 years before you actually decide to retire. Discuss your plans with your family and get them into confidence. Assess the earnings and expenses of each family member, and take a collective decision of how the financials are doing to be handled post your retirement. Without your family’s wholeheartedsupport, your retirement plans won’t succeed.
2. Expenses don’t have to stop, they just needto be watched – Just because you want to retire early, you don’t have to live like a monk. Prioritize your expenses and keep a tight watch on them. Avoid draining habits like credit card usage and taking personal loans. Spend within your means. And yes, setting contingency funds for unplanned expenses is a must.
3. Prioritize your life goals – No two people have the same goals for the future. Several factors influence the financial goals you need to set – the number of kids and dependents in the family, health considerations, loans and liabilities, properties owned and so on. First forecast the investment requirement for safeguarding your mandatory needs. Then you can work out how much extra money is required to pursue your future passions and hobbies, post-retirement.
4. Smart investments think both short and long term –Start by researching on the various long term and short term investment instruments available at your disposal. Long term investments must be with secure financial players with a bankable reputation. Life insurance, PPF, NPS, retirement funds are the most popular options. How much money you are going to get out of your retirals (PF, gratuity, pension, etc) also need to be factored in.
For short to medium term for 2-8 years, people generally rely on government small savings schemes, mutual funds, and fixed deposits. Alternatively, you can consider investing in chit funds. They will keep your money in rotation for a tenure of 2 years at a time, you can withdraw whenever a need arises. So chit funds work as both an investment and credit instrument.
Retiring early is a bold step, but it doesn’t have to be a risk if you plan it right. There is absolutely no meaning in carrying on working in a dead routine job if you are doing it just for financial security. Money can be managed with smart planning and systematic action. When your mind is free of worry – both professional and financial – you will enjoy your life to the fullest. Who knows one of your hobbies or passions might itself turn into a new exciting career opportunity!
About Us – Shanthala Chits is in the business of chit funds for over 2 decades now. We are a Government approved chit fund company with a 24-year successful track record and thousands of satisfied customers. Shanthala Chits is registered under the Chit Fund Act of 1982, the Government of Karnataka. We are one of the most popular chit fund houses based out of Bengaluru, known for our customer satisfaction and secure investments. Get in touch with us and start with an investment scheme. We will be glad to help you out with the right scheme that matches your needs.