Tips to manage your finances for your dream retirement home
Building a retirement nest is easy if you use your pre-retirement years well. We share 5 tips.
It is every person’s dream to have a peaceful retirement. After working hard all our lives, we want tranquility and freedom from financial pressures. The retirement years can be the golden years of a person’s life.
But so many people have a rough retirement. Lack of savings, unpaid debts and dependence for shelter and subsistence corrode the last remaining joys of a person’s life. Most senior citizens are also troubled about maintaining a large home with dwindling savings.
Here are 5 tips to manage your finances and realise your dream of a beautiful retirement home: Read More
- Save a part of the monthly salary till you retire.
This is an easy practice to follow if one starts early. It takes discipline to set aside at least 10% of one’s income every month. It is easier to do if one does not have too many dependents. However, this is a necessary step. The money saved can be put in a separate savings account. When there is a large sum of money in the bank, you can invest it in making a down payment for your dream retirement home.
- Save your increment and bonus.
It is tempting to spend more when one earns a promotion and increment. The same goes for the yearly bonus. However, if you set aside at least half of the increment given to you the sum can be added to the monthly 10% saving from your salary. This will result in a large fund of money that you can spend for setting up your retirement home.
- Transfer your EPF.
The Employee Provident Fund (EPF) is an excellent saving tool. One must mandatorily contribute to it every month, and it cannot be withdrawn easily. When you change your place of employment, transfer the EPF instead of withdrawing it. This will ensure continued savings. By the time you retire, the EPF will be a sizeable fund of money that can help you towards building your house.
- Take a loan instead of dipping into your savings.
We have many family obligations, chief among which is paying for our children’s education. If your child wants to pursue higher education, set up a separate savings fund for it, which is different from your personal savings. You can even take an education loan – it is payable by EMI (Equated Monthly Instalment) and you can easily borrow from your salary for it. Meanwhile, you can continue creating wealth for your future home.
- Repay all your debts before you retire.
You must remember that you will not get a loan when you become older, so it will be difficult to repay any borrowed money in your senior years. Instead, pay off all outstanding amounts when you still have a job. This will ensure peace of mind when you retire. It will also help you build your dream home without interference from creditors.
These tips look simple, but following them diligently will help build a noteworthy sum of money that can help you realise your dream of an ideal home for your golden years.