How to Plan for Retirement When You're Already in Your 40's?



We are always told to start saving for retirement right from the time when we are young. However, what are you to do if you weren’t able to save much and have entered your 40s now? Is it still possible to plan for your twilight years now? The answer is “yes”!

The following are some tips on how you can plan for your retirement even if you started late:

1. Pick a Number
The first thing you need to do is determine your retirement amount. Many experts believe that you need around 10 times your ending income to survive through the retirement years.  However, since you are beginning to save money quite late, you may not be able to achieve that target by the time you retire. So, what you can do is crunch some numbers and get a “conservative” figure that works for you.

2. Start Saving
Now, not only you need to start saving as soon as possible, you must increase the saving amount every month. The rule of thumb is that you should put 10% of your income in the retirement fund, but in this case, it might not be enough. This is because you have to achieve your target in less time as opposed to those who start saving for retirement early. Thus, you should go for 20% savings instead.
You should also try to increase the percentage over time as you see fit. Just be sure you have enough room for the payment of EMIs and credit card bills as you don’t want to hurt your CIBIL score. After all, it’s not easy to get a loan with bad credit score.

3. Cut Down on Big Expenses
You can’t save money unless you cut down on some luxuries. So, take some time out and assess all your costs. Identify the expenses that are making a big dent in your savings but can be easily dropped. For instance, instead of buying a new car that you have been wanting to upgrade to, why not refurbish your current car, or maybe get some paint job to give it a new look? You can also try to avoid eating at expensive restaurants every now and then, or limit going to the movies when you can watch them at home for a lesser price.

4. Reduce Your Debt
If you have taken any loans, then they will interfere with your retirement plan by taking away a chunk of your monthly income. Thus, you must repay them as soon as possible.
You can start by repaying the high-interest-rate loans first and then move to the ones that have a smaller rate. You can also consider other options such as debt consolidation. Just be sure to keep an eye on your CIBIL score when you go about it.

5. Invest in a Good Health Insurance Plan
As you grow older your health deteriorates faster. You are also at a higher risk of developing serious ailments such as heart diseases, diabetes, etc. These problems can easily rob you of your savings if you want quality healthcare services. This is a big problem when you want to save as much money as possible for a comfortable retirement.
A good insurance plan is thus a smart thing to invest your money into. It offers financial aid for all kinds of medical emergencies as well as tax benefits. So, take your time and compare all the options available in the market. Pick the one that doesn’t hurt your pocket but gives ample coverage still.

6. Don’t Touch Your Retirement Money
One of the most important things that you will have to learn for an easy retirement is “commitment”. Your monthly contribution to your retirement fund should only increase with time. Not only that, you should resist the temptation of using the fund for short-term requirements no matter what the case. If you are not able to get a loan for low CIBIL score, then borrow money from friends or family. However, you should not dip into your retirement fund. In your 40s, that’s a risk you can’t afford to take.





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