How To Maintain Your Financial Independence After Retirement?

After working for many years, when you retire, you dream of a life where you don’t have to worry about financial difficulties, and you will be able to live a financially independent life. But things may not go as you would have imagined, especially if you are not well prepared for your financial independence. Here are some important points that can help you live a financially independent life after your retirement.

Financial Discipline Is Paramount

You can’t afford to give up your financial discipline after retirement, instead, it needs to be further strengthened. When using your credit card, make sure that you repay the outstanding amount within interest-free period. Also, make sure that you pay equated monthly instalment (EMIs) on your existing loans on time. Avoid a high credit utilisation ratio when using an unsecured payment instrument such as a credit card.

Never Lend Money After Your Retirement

In the long journey of your life, you would have made many friends and close relatives. Post-retirement, you get a lump sum retirement fund to meet your financial needs for the rest of your life. However, people around you often know that you have a big corpus in hand, and they may see you as an easy financial support whenever they have a liquidity crunch. You must stay careful of such people who stay in touch with you for your money. Try to say a big ‘No’ to people who want to borrow money from you. It’s not easy to recover money from people who are close to you. You may end up losing both money and friendship or a relationship.

Timely Renew Your Health Policy

Paying hospital expenses after retirement can take away a big share of your retirement corpus. So, the best way to meet your hospitalisation bills is through your health insurance policy. Always renew your health policy on time and never let your health policy lapse due to non-payment of the renewal premium.

Mitigate The Inflation Risk

You may not know, but inflation gradually diminishes the size of your retirement corpus if it is left idle. So, you may fall short of money during your retirement period due to the impact of inflation. The best way to mitigate the inflation risk is to keep your retirement corpus invested in such a way that the return on your investment is higher than the prevailing inflation rate.

Financial independence is important if you want to enjoy your retirement without any financial challenges and to meet your retirement goal on time. So, try to avoid the things that can put your financial independence at risk after retirement.

The author is an independent financial journalist.

(Disclaimer: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)