One of the oldest rules of financial planning is diversification. Young minds are prone to take more financial risks as compared to their older counterparts. A diversified approach can help mitigate the risks due to market fluctuations. The retirement corpus needs constant care and diversification helps achieve that.
4. Clear debts before retiring
A home loan, student loan, personal finance or credit card are debts that should be cleared before entering the retirement years. The retirement corpus is a fixed amount which needs to be handled strategically so that the debts don’t corrode your savings. A debt can have a considerable impact on the corpus if it is not cleared while earning.
5. Don't touch the retirement fund before retiring
This is an important aspect of retirement saving. Regardless of the effort put behind creating a corpus, if the retirement fund starts seeing withdrawals before retiring then one can see a direct negative impact on the fund. Compounding can work its magic only if it is not withdrawn mid-way. Retirement saving is all about creating a spending power at an age when income stops. This should take top priority when it comes to dipping into the retirement corpus.
A well-planned approach and commitment to retirement savings are prerequisites to a good retirement fund. This does take a lot of dedication and planning but helps you achieve financial independence in the golden years of life. These five rules can help in making retirement the beginning of a whole new adventure.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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