Ensure to achieve these five financial milestones to have a sense of security which ultimately helps in living a contented life.
As we cross each milestone of our lives, we often find ourselves contemplating our existing financial situation and the road that lies ahead of us. There may be days when we feel content with our financial decisions, while there may be times when we think ‘what if’ we did things differently. When women start earning, it is always better to start financial planning and saving, investing for the future.
As the saying goes, “better late than never”, women should have a long term approach to achieve implicit investment goals. One must understand the importance of securing and saving for the future to attain good health and smart wealth. For women approaching their 50’s, it is a good time to pause and analyze the success of their investments made in the past. This time also presents a new opportunity to re-focus on financial planning goals.
When envisioning the road ahead, one must include and ensure to achieve the following five financial milestones that produce a sense of security which ultimately helps in living a happy life:
1. Minimum or Zero Debt: The foremost part of financial planning in the ’50s, should focus on minimizing and clearing debts as soon as possible, such as a home or car loan, credit card payments etc. As lives move on from being dynamic to welcoming stability, one would not want to continue paying off mortgages and loans with interest from savings for a long time. Therefore, the 50’s is the time to make decisions that very strategically which helps to achieve a debt-free future so that one can work onwards to create a more secured pool of wealth for oneself and family.
2. Review and re-allocate investments as required: In all prospects of life, most investments that people would have made in the past must be coming to a steady closure. As a woman enters in their 50’s, it’s the best time to re-consider those past investments and re-allocate them as and when required. It is important to consider the right balance of investments between equity and debt, or PPF, or bonds etc. for which many credible financial services are available in the market. This would enable to minimize the risk factor and diversify schemes carrying medium to high risk to ultimately suit in changing lifestyle. It helps to obtain a more smooth financial position in the ’50s or go for SWP- Systematic withdrawal plans if considering early retirement.
3. Achieve Retirement Savings Target: Another important milestone for women in their 50’s should be to achieve an accumulated corpus of savings. This corpus would not only help to meet the daily living expenses but also enable them to realize personal goals with confidence. Also, one must be careful in keeping their savings for future family expenses and financial planning and not miss them due to other obligations towards children or family members. Which is why one must ensure to inculcate in children the habit of saving and investing the money as soon as they start earning.
4. Maintain a separate ‘Emergency Fund’: While paying off debt, while saving for retirement may seem to be huge targets to achieve, but not impossible. In addition to these, people must realize that other than the appropriate medical and life insurance covers running in the background, one should also consider a separate pool of funds to be utilized in case of any emergencies. These may or may not be restricted to meet individual requirements, but it would provide that extra cushion to take care of dependent members or emergencies related to. For such investments, there should be liquid debt funds.
5. Setup a will: Often sidelined on various grounds, a basic will is now becoming a document of critical importance in order to keep your retirement life free of unnecessary quarrels and legal battles that may cause problems between family members or jeopardize relations completely. A will, as a legitimate document, proves highly useful to secure assets and savings for the future, just the way one would like them to be. So the suggestion is to not wait or delay it further and have it prepared by an expert lawyer at the earliest.
Finally, for women in their 50’s looking to live a secure, healthy and happy future, it is recommended that they adhere to these guidelines with utmost responsibility.
(By Priti Rathi Gupta Founder, LXME and Managing Director, Anand Rathi Shares & Stock Brokers)