Summary of this article
As medical and technological advances boost life expectancy, life after retirement now often spans 25 years or more for someone retiring at 60.
People tend to delay their retirement savings during their active income-earning period as they think they have plenty of time left.
A major mistake is not reviewing your investments as your life, family needs and financial goals evolve.
Many Indians begin planning for retirement only in the later stages of life, while others avoid it altogether, assuming their existing savings will be sufficient. Unfortunately, most realise only after retirement that their savings often fall short of what is actually needed.
By recognising various pitfalls early in life, individuals can prepare more effectively to ensure their golden years remain peaceful, independent, and financially secure.
Here are a few things to keep in mind:
1. Underestimating How Long You Will Live
As medical and technological advances boost life expectancy, life after retirement now often spans 25 years or more for someone retiring at 60. For those planning to retire early, long‑term financial preparation becomes even more critical as savings or the corpus accumulated must last for many extra years to sustain the lifestyle you desire throughout the retirement period. However, many people fail to plan for retirement, keeping this fact in mind.
2. Delaying Retirement Planning
People tend to delay their retirement savings during their active income-earning period as they think they have plenty of time left. “They often start giving retirement real thought only in the last 10-12 years before they stop working. One should ensure they plan much earlier in life, as the money one accumulates compounds over time when you begin investing at an early age,” says Sabyasachi Sarkar, MD & CEO of Go Digit Life Insurance.
3. Relying Only on Employer-Provided Benefits
A major retirement planning mistake is assuming that only contributing to an employer‑provided retirement savings scheme, gratuity, or company-sponsored health insurance is enough for long-term financial security. While retirement savings through such options help form a good base, they may not be sufficient to meet all the future living costs.
“Employer-provided insurance protects you only as long as you remain employed and stops the moment you retire or switch jobs. This creates a significant gap at a stage of life when your healthcare needs can rise. As you age, the cost of treatments, medications, diagnostics, and long-term care often increases sharply. Without personal health insurance, hospitalisation expenses can quickly erode your retirement corpus,” says Sarkar.
4. Ignoring Inflation In Long-Term Planning
Inflation maintains its upward trajectory, which makes all normal expenses more expensive. The present affordable price of items will double during the next two decades, which leads to a decrease in the value of your savings. The retirement planning process requires you to consider inflation because it will affect your future income value.
5. Depending On A Single Retirement Product
“Your retirement security shouldn’t solely rest on a single investment - be it a pension plan, a savings policy, an FD, or a market‑linked product. A well‑balanced mix of term life insurance, annuities, and savings or investment plans creates a diversified safety net, reducing risk and giving you a much stronger and more reliable retirement foundation,” says Sarkar.
6. Not Choosing a Joint Life Annuity
Most retirees select single-life annuities without understanding that their spouse also requires annuity income to meet her expenses in their absence. A joint life annuity provides ongoing pension payments to your partner if something happens to you. Your retirement plans protect your partner while maintaining financial security for both your lives, not just one.
7. Failing to Review Investments
A major mistake is not reviewing your investments as your life, family needs, and financial goals evolve. You should review your insurance coverage, retirement plans, and investment portfolio to maintain proper alignment between your current responsibilities and future goals, helping you stay prepared for major milestones.
8. Surrendering Policies Too Soon
It’s common for people to think they don’t need long‑term insurance and surrender their policies midway. But this choice can derail retirement planning, because these products are structured to deliver their highest benefits at maturity. Staying invested helps you earn bonuses and guaranteed returns that add stability and strength to your retirement savings.
One needs to plan one’s retirement finances through multiple years of strategic planning, disciplined investment, and protective measures to achieve financial comfort during their retirement years.
