The steps you take today will shape up your tomorrow. We all know that preparedness is the key to secure our financial future. It’s very important to be ready for the future, especially for women who are on a path to achieve complete independence.
Monster Salary Index (MSI) data showed that women earned 25% less in India, as compared to their male counterparts. In addition to this wide income-gap, women are also found to have saved less for their retirement than men. Pairing these statistics with the fact that women live longer than men, drives home an important message to you as a woman.
You need to begin planning for your future without any further delay. You should evaluate your current situation, envision your future lifestyle and identify your financial goals. Investment and insurance are two powerful tools that enable you to secure your future.
Here are three steps that can help you achieve financial security in future:
1. Outline Your Financial Goals
You need to identify your financial goals for the future, envision your lifestyle in upcoming days and after retirement. You need to evaluate the corpus that you will need to lead a satisfactory life after your retirement.
According to Social Security Administration, a woman is expected to live naturally until the age of 86.6. It means you should plan for a long retirement and build a corpus to last twenty to thirty years.
Start by prioritizing your financial goals by grouping them into ‘Necessities’ and ‘Luxuries’. For example, necessities are obligations such as health care, home maintenance and other living expenses. A new car or a travel plan may fall under luxury.
2. Insure Yourself against Financial Emergencies
Buying insurance plans is very important to secure your savings against any financial emergencies. Financial advisors often say, “Insurance is the best form of investment”.
Insurance helps you manage risk and transfer financial obligations to insurance companies in case of unforeseen events. Generally, you should have the following two insurance types in your portfolio for a secured future:
It’s important to secure your life, and provide financial security to your loved ones, to meet their financial needs in your absence. Life insurance products also act as an investment tool by blending savings with insurance and providing death benefits in the unforeseen event of your demise along with survival benefits if you survive the insured period.
Health is an important component of living a good life. However, your health is often unpredictable with a sedentary lifestyle, rising pollution and increasing age taking its toll. Rising health care costs, and the declining state of your health means you can end up emptying all your savings in case of uncertain medical emergencies.
3. Invest to Plan Your Retirement
Investment is the most important and prudent step for building your financial security. You must invest in various investment tools to build a corpus for your retirement. Remember, it’s important to invest today so as to gain a secured tomorrow.
There are various tools available to safeguard your savings and build a financially secured future with enough corpus. For example, investing in Fixed Deposit for women with Bajaj Finance can get you an interest rate of up to 8.20%.
Talking about investments, Indians consider both fixed deposits and recurring deposits as potent investment options for years. If you are ready to invest your savings or surplus cash, you can think of investing in either of these two.
However, if you talk of choosing between the two to drive the best out of your money, it could be a daunting task.
In the context of the same, let’s provide you some basics and characteristics of a fixed deposit (FD) and recurring deposit account to clear your confusion.
What are Fixed Deposits?
A fixed deposit is an investment vehicle which is offered by banks or non-banking finance companies (NBFCs) to let investors avail the benefit of a higher interest rate. The FD interest rates are higher as compared to a traditional savings account. The ROI on FDs are also fixed as it’s not affected by market conditions as in mutual funds and more. You can avail a flexible tenor for your investment as well as per the terms of your service provider.
However, unplanned and improper investments can be dangerous for your finances. You, therefore, need to be careful where you put your money. While investing in equity carries market risk, FD (Fixed Deposits) ensure that your hard-earned money is always safe because your Principal is secured. Moreover, FDs also provide assured returns.
With a minimum deposit of as low as Rs. 25,000 and a flexible tenor, you can invest in multiple FDs or split your investment into smaller amounts for different tenors to ensure a regular stream of income in the future. You can also use the maturity amount of lower tenor FDs for your liquid needs or you can reinvest it again in a new FD.