4 Things to Ensure You Have a Fun & Relaxed Retired Life

Your ability to save and invest while you are working will decide whether you can lead a happy retired life or have to struggle to meet even your regular expenses post retirement. The key to successful investing is to start as early as possible and save from the day you start working. The compounding effect of your early savings will prove to be very fruitful and go a long way in helping you build a safe and healthy corpus for your retired life.

Use the Right Tools to Plan

By using tools like a retirement calculator or a pension plan calculator, you can easily determine the amount of funds you would need post retirement and how much need to invest to achieve that goal. The earlier you start, the better it will be for you to build a reasonable corpus to spend your retired life in a relaxed manner, without any kind of financial worries.

Tips for Retirement Planning

Here are some tips that will help you enjoy your retired life:

• Always keep a specific percentage (say about 10 percent of your earnings) for saving purposes and invest them in long term investment options. This could be done via investment in a public provident fund or pension funds. Increase the amount saved with every increase in your salary. This will help you deal with the impact of inflation on your post retirement expenses.
• Avoid using the funds kept aside for your retirement to fulfill any other needs or expenses that come up during your everyday life. Also, try to use only a small percentage of your retirement corpus in the first few years of retired life. This is important to ensure that you don’t outlive your savings and have to struggle for funds in the later years of your retired life. You can use a retirement calculator to keep track of the savings too.
• Ensure that you have repaid all your loans or debts before you retire. Also, modify your investment from equity to debt as your age increases or you near retirement so as to reduce the risk involved.
• Invest in a health insurance plan so that you do not need to borrow from your retirement kitty to pay hospital and medical expenses. Buy a plan that offers you the maximum coverage, since getting health insurance is difficult as you age and develop chronic ailments like high blood pressure and diabetes. Buying a term insurance or life insurance plan is also recommended to protect your dependent family members from any kind of financial worries if something untoward happens.

So, using retirement planning calculators, saving consistently, investing wisely in insurance products and repaying all debts before retirement are the prerequisites to a happy retired life.

Home loan facts: 5 things to know before you sign up

We list the five most important facts that you must do before you formally apply for the home loan.

Are you about to apply for a home loan? We have only three activities to suggest: Research, research and research! Consider the following five points to get you started:

1. Understand what loan eligibility means. Banks and lending institutions offer about 60 times your current income as the home loan amount. You may have a high salary, but that may not automatically translate into a high loan eligibility. The lending institution will consider the prominent components of your pay package, while setting aside the LTA and Medical Allowance. The eligibility is then calculated on the basis of the remainder amount. Use a loan eligibility calculator to find your eligibility.
2. How much EMI is too much? Normally, any EMI that exceeds 30% of your finances is not ideal, and an amount exceeding 50% is a stretch. Your monthly budget must not be strained owing to the EMI payable. Use a home loan EMI calculator to compute how much you will pay the lending institution every month basis the loan amount, tenure and interest charged on it. You can keep manipulating the figures using the home loan calculator to arrive at a figure that suits your budget.
3. A pre-approval is important – here’s why. Normally, people apply for a home loan after they have found a suitable property. This is a good approach, but taking a pre-approval is even better. Taking a loan approval tells the lender that you are a serious buyer who is about to take a loan in the next few months. The loan approval checks your personal eligibility and helps you understand how much your borrowing limits are.
4. An expert must see the property documents. It is always a good idea to appoint a lawyer to study the property documents. This is important to verify the document’s layout, authenticity, chain of agreements (in case of two or more past buyers), permissions (in case of under-construction projects), titles and freehold, etc. Get any lacunae corrected before you apply for the loan – unsuitable properties are not liable for home loans. Rectifications at a later date will result in delays.
5. The interest rate is everything. Ultimately, the interest charged on the loan amount decides the monthly outgo. A lower rate of interest helps you save more money. You can opt for a floating rate of interest if the market rates are expected to slide in the next few months. Another good measure to save money is to repay the loan early, i.e. before the tenure ends.