Many people think that after retirement things become easier. You don’t have to work anymore, you can travel and do everything you have always dreamed of doing. There are some cases where this is true, but, in most of the cases, retirement becomes extremely challenging. It’s not as simple as it sounds like to have a worry-free retirement. There are a lot of challenges that may arise which could change the entire equation. For example:

1. Increasing life expectancy
2. Failing to beat inflation
3. The inadequacy of the corpus to meet monthly requirements
4. Not being prepared to handle medical emergencies
5. Not knowing how much you can set aside as estate for your children after meeting your requirements
6. Not managing taxes efficiently

Financial planning at this phase of life becomes even more important than your earlier years. Managing your income is always important, however, it becomes even more important when this income comes from your hard-earned savings. In this article we will tell you the simplest ways to enjoy a happy and worry-free retirement:

• Clear your debt first: Pay down your debts as soon as you retire. Financial freedom can be attained only when you are debt free.
• Know your retirement Corpus: Understand the corpus that you require to meet your monthly requirement for the next 25 to 30 years taking inflation into consideration.
• Create an emergency corpus: Set aside 6 months of expenses as an emergency corpus in a liquid fund or bank savings. This will allow you to take care of any unforeseen events without having to dip into your growth-oriented assets.
• Purchase health insurance for the senior citizen: Although the premiums are slightly on the higher end and they tend to increase further post age 60, it is still a better choice to have a health cover at least till you attain age 70. Apart from your health insurance cover, It is important to set aside a portion of your fund as medical corpus available at all times. This corpus can take care of any expenses arising outside your regular health cover.
• Appropriate asset allocation: It is important to understand your risk tolerance level and derive an appropriate asset allocation once you retire. It may not be advisable to have all your investments in risk-free assets, thereby failing to beat inflation. Similarly, it may not be appropriate to take high risks and invest entirely towards growth-oriented assets.
• As your age progress, it is important to reduce exposure towards riskier asset class and move towards income producing assets. An appropriate balance of assets is essential to protecting your capital as well as to grow your investments and beat inflation.
• Create a Bucket List: List down all your other goals and aspirations such as an exotic vacation, vehicle purchase, pursuing your hobbies etc and calculate the total corpus you would need to achieve these.
• Funding for your goals and monthly requirement: Once you are clear with your goals and how much you would actually require to meet your daily needs, it’s time to determine how to fund these requirements. Funding can be from an income generating assets or through capital withdrawal. Identify various revenue generating assets from which you can get regular income to take care of your monthly expenses. It’s important to consider the tax implications of your investments. The less you pay in taxes, the longer your corpus can last.
• Create a will: Identify the assets that you would like to leave behind for your children after understanding how much of your wealth you actually need for your self to meet your overall requirements. It is important to create a will stating how you would want to distribute your assets to your loved ones.

Retirement can be simplified further by choosing a financial advisor who can help you take care of all these requirements. Ensure that you are dealing with someone who is responsive to your needs and knows what is in your best interest. However, It is also important for you to be aware of what is happening with your portfolio and have a sound understanding of how your money is being managed. After all, it is your hard earned money!