Why insurance is critical for a peaceful retirement

Plan ahead to fund holidays during your golden years

Most of us spend our lives immersed in responsibilities—meeting deadlines, striving for career growth and managing the demands of daily life. In the midst of it all, we often overlook our own needs and aspirations. It is only later in life, after retirement, that we start asking: What do I want to do? How should I spend my time?

It is very natural to have these moments of reflection.

With life expectancy rising thanks to better healthcare, lifestyle habits and an overall vastly improved quality of life, post-retirement life can easily span 20 years or more.

Earlier, retirement was seen as a time to care for grandchildren and lead a passive life, but that’s no longer the norm. Today, many healthy retirees view this phase as a chance to pursue passions, travel and experience life in new ways.

In fact, data backs it. A recent report by consultancy Frost & Sullivan and travel platform Amadeus indicates the number of elderly Indians travelling abroad is expected to surge to 7.3 million by 2030, from 1.3 million in 2011. This trend indicates that more retirees are seeking to make the most of their golden years through international travel.

Also read: How Indian overseas-bound travellers are managing rising summer vacation costs, forex outgo

Financial challenges couples face

When planning for life after 60, a lot of couples miscalculate the amount that they will need after their retirement.

One common mistake is assuming that a limited corpus of savings will suffice, on expectations that expenses—the cost of the daily commute, for instance—will come down. In reality, however, inflation continues to push costs higher. For instance, if your current monthly expenses are Rs 1 lakh, you will need Rs 2.16 lakh (assuming a rate of inflation of 8 percent) to buy the same amount of goods and services in 10 years to maintain the same standard of living. This highlights how significantly inflation can erode the value of money over time.

On top of that, medical uncertainties can lead to additional out-of-pocket costs, even with health insurance. To overcome these challenges and meet your post-retirement goals, you need to be fiscally prepared. That’s where proper financial planning can be of immense help—where you consider the essential and medical expenses, along with expenses for travelling or cultivating hobbies, and life expectancy after retirement.

Preparing early ensures that such aspirations can be fulfilled without financial stress. However, if you have not planned for it yet, it’s never too late, and you can start now. After all, retirement should be about living meaningfully, not just making ends meet.

Investment, insurance and retirement planning

Different investment options can help you live a purposeful retired life. Among various investment options, life insurance policies—including pension, annuity plans—play a key role in building financial security.

Besides death benefit and income generation, life insurance policies also come with added protection through riders such as critical illness and accidental death benefits. Critical illness coverage can help manage large medical expenses that arise during the treatment of serious conditions. For retirees who enjoy travel and outdoor activities, accidental death benefits can help reduce the financial impact that unexpected events can have on their loved ones.

Also read: How to keep your credit card spending in check and maximise rewards this holiday season

Embracing the freedom years

Retirement might be the beginning of a new, rewarding chapter. It offers the freedom to pursue passions, explore new places and enjoy the moments that may have taken the back seat during your busy working years.

With a well-thought-out retirement plan, you can build a solid financial foundation that not only supports your day-to-day needs but also provides a safety net during health or financial emergencies.

By combining the right mix of life insurance, investment options and smart planning tools, you can confidently shape a retirement that reflects your goals, interests and dreams.

(The author is the Chief Distribution Officer, Proprietary and PNB Channel, PNB MetLife)

Disclaimer: The views expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.