Retirement funds: Best practices to make the fund last a lifetime

Insufficient retirement fund is a worry for every retired person but not if you follow these habits.

How to make your retirement funds last a lifetime?

Sociologist Robert Atchley had admirably illustrated the retirement period in six phases: pre-retirement, retirement, contentment, disenchantment, reorientation, and routine. While the later phases are more emotionally described, the first two phases are more of a pragmatic nature. 

A perfect retirement plan must be established with a thorough analysis. This includes the planning that goes into pre-retirement and the stabilisation of lifestyle in the post-retirement phase. What is most crucial to plan for a contented and happy retirement is to build an adequate retirement fund and make it last your lifetime.

The following comprehensive approach may help you make your retirement fund last longer.

1. Cut down on avoidable expenses

Basic amenities of our daily life, such as food, home maintenance, transportation, insurance premium, education expenses, etc., are impossible to ignore. But things like luxury shopping can be cut down if you want that extra amount to save for retirement. These savings will increase your interest income during unfortunate circumstances without depleting your finances.

Related: Five Retirement Planning Blunders To Avoid

2. Capitalise on senior citizen/retiree benefits

A retired person may get a pension amount regularly or retirement benefits like gratuity, depending on the nature of employment. Besides, investment-related benefits such as higher interest rates on deposits and subsidised borrowing rates enhance your retirement income. Apart from your savings over the years, getting the most out of available incentives is also crucial. This will help in maintaining your retirement fund for a longer period.

3. Chalk out a retirement spending plan

It is extremely necessary to realise that expenses and costs won’t be the same when you retire. So, you should forecast a realistic budget considering inflation and what expenses are likely to stay the same. This retirement savings plan will guide you to stay focused on your investments and expenditure.

Related: Five Must-Have Investment Instruments For Retirement Planning

4. Follow a healthy lifestyle

Maintaining a healthy lifestyle helps you to stay fit and disease-free. This, in turn, has high importance in keeping your retirement funds last longer. As long as you manage to stay healthy and avoid hospitalisation, your regular retired life wouldn’t put a lot of dents on your retirement fund. 

5. Buy a home early in your career

It is a smart decision to buy your home at an early age. It will save you from having to pay a higher amount later and also earn you good returns. Simultaneously, you won’t have to continue repaying the EMIs in your 50s and face the risk of running out of finances after retirement. 

Related: What Is The Right Age To Start Planning Your Retirement?

6. Know your personal net worth

As a part of your retirement planning, make a list of your assets and liabilities. Clear off all your debts before stepping into your retirement shoes. This will help you augment your retirement funds.

While the tips to make your retirement fund last longer are simple, following them diligently over several decades is the bigger challenge. Therefore, you must adopt these practices in the form of habits so that you end up better prepared for your retirement.

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