Everyone looks forward to their retirement. In this golden era, an individual can just lay back and enjoy their life. This is the time they indulge themselves in their hobbies or anything that their heart wishes for. Though an individual usually retires in their 50s or 60s, there is no said rule that you cannot retire early. The following signs indicate that you are prepared for the future and can afford to enjoy your retirement era:
- You are living debt-free
If you retire early, without paying off your debts such as mortgage, car loan, etc. it will take a huge toll on your financial as well as mental health. It would be a nightmare to pay for these loans when your paycheques have stopped coming in. Hence, it is important to delay the process of retirement if you have debts to pay off. However, if you are living a debt-free life, then you are one step closer towards enjoying your retirement life.
- You have saved enough to last your lifetime
As a general rule of retirement, one is expected to save at least 25 times their current annual gross expenses. There are different types of mutual funds such as equity fund, liquid fund, debt fund, etc. that can be used to achieve this amount. If your retirement lifestyle entails expenditures worth Rs 50,000 per month, then you must save and accumulate a retirement corpus with a size of at least Rs 1.5 crores. If you plan to retire earlier than the ideal retirement age, you might want to increase this multiplier to 30 or even 40 times.
- Your health care and expenses are provided for and looked after
This is often the most ignored, yet significant part of a financial plan and budgeting. As you grow old, the premium of your health care shoots the sky. If you are covered under your company’s health insurance plan, it will stop to exist once you retire. Before you decide to hang up your boots and retire, it is necessary that you have provided for all medical exigencies that might come your way. Not doing so could create a huge dent in your retirement corpus.
- You have an emergency fund in place
Emergencies come unannounced. Hence, it is always wise to have an emergency fund to cater to these unexpected expenses. Though, it is recommended to save at least three to six months of your living expenses, but you might consider saving at least six to twelves months of your expenses to cover for any expenses in your retirement.
- No dependents
Do you have parents who are senior citizens are depended on your for financial assistance? Or maybe you have children who haven’t finished their education and depended on you for their tuition fees and other expenses? If that’s the case then you might want to delay your retirement for some time. However, if you have no dependents than you can retire without any hiccups.
Retirement is a beautiful end to your working life. It’s a happy transition for hustle and bustle to relax and solace. Make sure that you are ready for this. Before stepping into the next big step, ensure that you have paid off all your debts and achieved the desired retirement corpus. Happy investing!