Top reasons to have a retirement plan

Here are four reasons why every individual must have a retirement fund:

  1. Lack of a social retirement benefitIndia has yet to implement a robust social security system with retirement benefits for its senior citizens. Although pensions and employee provident funds do exist, they may not be sufficient to cover all expenses. This is why creating a diversified retirement fund with fixed income and mutual fund investments becomes crucial.

  2. Financial independenceFor generations, older Indians have depended on their children for retirement support. Lately, youngsters are leading more independent lives. Often, they are unable to support their parents financially. Even if they can do it, being responsible for yourself will give you more independence to live life on your own terms because you will not be answerable to anyone else.

  3. Rising costsAs an investor, you will need to account for rising costs. Inflation is a vital element to consider when planning your retirement. If you are unable to keep up with rising costs, you may have to compromise on your standard of living.

  4. Medical emergenciesHealthcare costs are pivotal to understanding the importance of retirement planning. While retail expenses continue to rise steadily, healthcare inflation is growing at alarming rate. While other financial goals may be negotiable, health cannot be compromised.

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