14 Tips to Ensure a Stress-Free Retirement Life
For some, retirement implies bringing a stop to most expenditures to save more at the cost of living well. Their inflation-adjusted monthly pension might not suffice. Others make systematic plans that allow them to spend equally without compensating for needs. Maintaining the same or a better lifestyle is achievable if you know where and when to spend. Here are 14 incredibly successful tips for a stress-free retirement.
Defining Stress-Free Retirement
Ending a professional career might come as a shock to many. The nightmarish feeling of spending less to save more can ruin your post-retirement experience. However, keeping yourself busy with physical or creative activities can improve your experience. Therefore, a routine and disciplined life is a prerequisite for a stress-free retirement.
A stress-free retirement period helps you acknowledge your emotions and set new goals. For example, while some retirees consider shifting to a new location to live after retirement, others might refurbish their homes or start a creative venture. However, the ultimate retirement experience comes with proper inflation-adjusted financial planning.
Financial Tips for Stress-Free Retirement
A successful post-retirement strategy should target parameters that can cause unnecessary stress. Although the post-retirement period might not be the same for everyone, retirees mostly worry about receiving tax benefits or pensions, handling their financial portfolio or earning additional income from freelance projects.
Here are 14 incredibly successful tips for a stress-free retirement.
- Early planning
Experts believe that retirement plans must commence at the beginning of one’s career. This gives enough room for adjustments, including job changes, monthly expenditure or savings, and economic fluctuations.
Financial prudence is a quality that helps young professionals plan their lives better. Consequently, they can make better financial or family decisions even after they retire. Although you can change your work domain more than once in your career, ensuring a continuous wealth accumulation from a young age helps.
- Consider economic variables that can affect your wealth
Retirement-related investments usually have a long time horizon. Changes in economic variables like inflation, unemployment, interest rates, and income tax can affect your wealth accumulation. Experts believe investing in wealth-creating tools like equities, bonds, and mutual funds can add value to your savings
- Make proper post-retirement goals
A planned post-retirement period is more beneficial than one without a goal. The pension provides a portion of your income, but you should consider making further plans to save and spend. Investing in volatile assets in retirement years is not advisable. Important post-retirement goals may include anticipated expenditure on children’s education, children’s marriage or medical expenses. You must quantify these goals and allocate your savings towards making investments for such goals.
- Revamp your perception of life
The urge to beautify and maximise your living years helps oppose recurring negative thoughts. Many consider shifting to a more peaceful location to avoid all distractions and concentrate on making life more meaningful.
The psychological effect of decluttering negativities changes your perception and gives you the strength to do something productive. Moreover, statistics show that a positive attitude towards the post-retirement stage can maximise your longevity by up to 30 years.
- Preparing for contingency situations
Health risks pose the greatest threat as you advance toward your old age. The unavailability of proper medical insurance and lack of government schemes or retirement benefits can scare a potential retiree. Creating a contingency fund is thus crucial and should equal at least six times your monthly expenses.
In order to have funds during such emergency situations, you may consider investing in liquid mutual funds as they tend to provide better returns than savings bank accounts. Also, make sure that your emergency fund gets replenished every year.
- Adopting a better lifestyle
Adopting a decent lifestyle can help reduce stress and excess expenditure. Unfortunately, many retirees spend lavishly and choose a routine-less standard of living. Consider enrolling for a class and learn new skills to further your knowledge or look for volunteering work in museums or hospitals. Socialising with your friends and family helps you work through your worries.
Experts believe that you can improve your lifestyle in 5 easy steps.
- Rise early and begin your day with a breathing exercise.
- Consider maintaining a diary or journal to record your daily routine.
- Question your regrets, passions, strengths and weaknesses.
- Choose the core values you choose to pass on to your children or grandchildren.
- Identify all the things that you value the most.
- Health first, everything else later
Keeping your body and mind active helps prolong your life and provide fulfilment. Practice exercises that work on stimulating movements. Maintain a balanced diet and try to stay away from intoxication. Always try to be updated with knowledge on subjects revolving around maintaining physical and mental health.
Ensure that you maintain close relationships with your family to stay away from loneliness. Extend emotional support to everyone who needs it to prevent feelings of isolation and prolonged negativity.
- Consider a second career/entrepreneurship
Money earned is money saved. Many retirees opt for secondary jobs or freelance projects to ensure a smooth flow of funds. You may choose a less stressful and flexible profession to suit your purpose.
You may also consider becoming an entrepreneur yourself. Statistics show that people above 50 years can create successful businesses owing to their experience and work ethics. In addition, self-employment boosts your spirit of living and makes you financially dependent.
- Look for applicable discounts and rebates for senior citizens
According to Section 80TTB of the Income Tax Act, senior citizens can claim deductions up to Rs. 50,000 on the interest income from a savings bank account or bank deposits. Senior citizens are also exempt from paying income tax for taxable income of up to Rs. 3,00,000.
Moreover, senior citizens can enjoy tax benefits on five-year fixed deposits, investments in public provident funds, life insurance premiums and investments in equity-linked savings schemes according to section 80C. In addition, senior citizens suffering from mental trauma or physical disabilities can earn further tax deductions of Rs. 75,000 to Rs. 1,25,000.
- Invest in health insurance
The rising rate of healthcare inflation and medical expenses can seriously affect your life savings. Ensure that you already have a proper health insurance plan that caters to emergency needs. In addition, prioritise your health by choosing health insurance that can be tweaked as per your health conditions.
Always check the age criteria and the maximum age limit for which the insurance plan is valid. Also, check the comprehensive insurance schemes for senior citizens issued by India’s Insurance Regulatory Development Authority (IRDA).
- Consider diversifying your investments
Always try to diversify your investments to ensure optimal personal finance management. The volatile economy makes the accumulation of assets in a single category risky. Risk distribution is particularly important for post-retirement investments because you may lose everything at once.
Try allocating your assets to low-risk investments, such as bond funds, fixed deposits. Ensure that your assets are not subject to sudden market shocks and are liquid enough. Each depositor in a bank is insured upto a maximum of Rs. 5,00,000 (Rupees Five Lakhs) for both principal and interest by Deposit Insurance and Credit Guarantee Corporation (DICGC).
- Free yourself from debts
An ideal post-retirement financial plan should begin with easing off debts even before retiring. Make sure you pay off your loans and all unpaid dues to lower the burden during your retirement life. Excess debts and loans can deplete your savings and deepen your liabilities.
Experts believe that a maximum of 36% financial debt after retirement is manageable. You may try refinancing your debts and paying more than the debt amount to get rid of them faster. Always re-consider your budget and bills before accepting such liabilities.
- Save enough for your family
Post-retirement planning is incomplete without planning for your family. A healthier and debt-free life is the perfect gift you can offer your family. Maintaining the financial security of your dependents is crucial. You can plan a financial provision that will not leave their life unstable in your absence.
- Accept professional advice that suits your purpose
A professional financial advisor might help you with thoughtful insights on investment and savings. Look for trustworthy individuals who charge low fees for their contributions. They Understand the risk profile of an investor and assign the right asset allocation suitable for the unique needs of the investor.
Professional financial advisors can also help you manage your post-retirement money through social security or retirement account distributions. They can also provide valuable advice on handling investments, pending inheritances or small business liabilities.
Retirement is neither a disability nor a liability if you understand how to manage your life, finances and family. Start your life afresh, maintain good health and hygiene and follow the successful tips mentioned above for a stress-free retirement life.
Frequently Asked Questions
What are some habits I should avoid when saving for my retirement?
When preparing for your retirement period, ensure you are not too conservative with money and not borrowing from your retirement wealth. Experts also believe that retiring too early can hamper your savings and decrease your wealth in the long run.
Is it advisable to retire early?
Early retirement is a risky venture but not impossible. Early retirees claim they can make better life planning and wealth management by retiring as early as 50 years. However, retiring earlier leaves you with the risk of depleting your savings sooner.
What is semi-retirement?
Instead of heading into retirement, some individuals consider maintaining a freelance or part-time less stress-free job as their full-time venture. Unlike early retirement, semi-retirement provides more financial stability and keeps you from experiencing the distress of ending your working life.