How to maintain a Work-Life balance after Retirement
Once you’re close to retirement or have already retired, your life becomes different. Certain changes define life after retirement. Some of the positive changes are that you get are plenty of free time, and the option to relax and enjoy a life of leisure.
May 2023
6 mins read
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However, your financial planning doesn’t stop once you retire. There are newer goal planning considerations to make. You have inflation and taxes to think about. The retirement corpus you have saved in your younger years is prone to draining from inflation and taxes. You’ve to ensure—with the right personal finance and investment planning—that you have a steady flow of funds that beat the inflation rate and also don’t get depleted by taxes.
Again, you’ve to manage several expenses once you retire. These can be household expenses, lifestyle expenses, emergency medical expenses, etc. Two contingencies you can plan for to put a check here is to get life and health insurance. These will ensure that you don’t lose out on money from unexpected expenses. So while goal setting in financial planning for your post-retirement, it’s important to keep a liquid fund for meeting these expenses.
In many cases, people feel an overwhelming sense of boredom and lack of purpose after retirement. Shifting to a lifestyle with a lot of free time after many years of work can be a bit difficult. Moreover, it can take some time to get used to not having a steady salary income credit into your account.
Working after retirement can help iron out these two things. There are several benefits of working after retirement. With the increasing life expectancy in present times, it can be a drain on your retirement funds. By engaging in freelancing or consulting employment, you can reduce the risk of outliving your retirement fund. You can also inculcate a sense of purpose as well as make productive use of your time.
Here are some considerations to make to start working after retirement and live a financially and mentally independent life:
- Invest in debt funds – One of the most important smart goals in financial planning once you retire is to make the right tax-saving investments for a steady flow of returns. If you’re okay with a high-risk exposure, then you can go ahead with debt funds. Since debt funds invest in securities such as corporate bonds, government securities, and other money market institutions, you may earn a steady interest income and optimal capital appreciation. You can consider short-term funds with a maturity of 1-3 years or long-term funds with a maturity period of 3-10 years . An ideal option can also be to go for monthly income plans (MIPs) as these can offer stable returns without high risk.
- Invest in equities – While it’s advisable to consider adjusting your allocation to include debt instruments, it can also make sense to retain some investments for retirement planning in equities too. This is because fixed instruments may not be as effective in beating inflation. There’s also a chance of outliving your retirement savings due to high life expectancy and increasing medical expenses. So, long-term investments in equity instruments can be an ideal tip for money management. As per SEBI Mutual Fund Regulations, about 65% of the investments, in this case, are made in equities and equity-related instruments. You can consider large-cap equity funds since they offer sustainable returns over a period of time. If you want to reduce your risk exposure, you can consider multi-cap equity funds. This way, you can diversify your portfolio across multiple sectors and reduce your risk.
- Maintain a contingency fund – A contingency fund is required even when you retire. You may have incorporated a contingency fund in your personal finance plan before retirement. But after retirement, there may be higher chances of risks from insufficient emergency funds. Moreover, getting loans for financial emergencies may be difficult post-retirement. If you try to withdraw your fixed income instruments before the maturity period, then you may face penalties. Hence, a contingency fund is essential to cover essential expenses such as rent, utility bills, medical costs, insurance premiums, and EMIs. Keeping a 6 to 12 month backup stored in a savings account is ideal.
- Venture into freelancing – Many industries have a steady demand for freelancers. Several websites offer freelancing jobs in multiple sectors. A great option is to offer online training in the field you specialise in. Content writing or blogging is also a flourishing space that you can explore. Most of these freelancing options require acquiring a certain set of skills and having a strong internet connection to work. After retirement, you’ll have plenty of free time so it will be easy to maintain a flexible schedule. These are great ways to keep a steady flow of income streaming in.
- Consider training and consultation – At retirement, you’d already have a lot of experience in your field. Using the insights gathered over the years can help you offer guidance to others. Many startups and businesses looking to hire consultants in advisory capacities. You may also engage in a training capacity for the employees in an organisation. Using your skills and insights to train the next generation is a great way to use your time and also earn a steady compensation. In case you have entrepreneurial dreams, you may also set up your consulting firm and website and offer both online and offline training. Creating training content and videos is also simple with the right set of tools nowadays. You can get as creative as you like.
- Follow your passion – Finally, you can choose to follow your dream or passion. There may be several hobbies you have been pursuing or wanting to pursue. You may choose to engage in them full-time and monetise them. This way, you get to fuel your talent as well as earn a steady income.
There’s no end to the things you can achieve even after retirement. With strong financial planning and efficiently managing your investments for retirement planning, you can have a fulfilling retired life.
Disclaimer: Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more
All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindia.com/mutual-funds/ieid.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more
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