Financial Planning Continues Even After Retirement

Post retirement planning is also as important as retirement planning if not more. People are often confused when it comes to post retirement planning. The rising costs in almost every sector, be it health, lifestyle, travel, vacation, entertainment etc. have the potential to throw any budget out of gear.

Whenever a person prepares a financial plan for his retirement, he estimates the needs according to a projected economic situation and lifestyle requirements. However, things can turn in an instant. For example who would have predicted that the inflation rate in India will touch 12 percent, while it was just around 5 percent a year ago? The cost associated with every conceivable item has skyrocketed during the past one year. This is a practical example of how fluid the situation can be when it comes to finances. The inflation is very much unpredictable and eats into your savings.

Since most of the savings that will fund you retirements will probably be invested in secure instruments, which offer relatively less or no risks and hence lower returns, inflation could be the deciding factor.

Along with the unpredictable nature of economics there are few harsh realities that come after retirement planning. For most of the retired persons, a major cause of concern is the health, which will only deteriorate as one grows older. A proper health insurance will be real hard to find, which covers the different ailments and their treatment costs. In most of the cases the onus on covering the costs of health care will rest on the person himself and if the trends are to be believed, the health care costs for life threatening situations are only going to rise.

Another complexity that comes with retirement planning is estimating the lifespan. As health care and awareness is growing people are living longer and if a person has planned for his retirement till age 70 and he outlives it to maybe 80 years or 85 then the costs of these additional years have to be accounted for.

A new found interest or an extravagant expenditure post retirement can also throw the entire retirement planning exercise out of gear. What if you haven't planned for leisurely vacation and one fine morning you decide that you can't do without a 15 day luxury cruise. Where will the money come from?

It therefore comes out that post-retirement financial planning is an extension of retirement planning and can be treated as an independent financial planning exercise in itself.