Why Retirement Planning is Crucial

Planning for retirement might seem like a daunting task, but it's essential for securing your financial future and ensuring you can enjoy your golden years. Many of us dream about travelling the world, spending quality time in beautiful places like Badulla and Bandarawela, going on hikes, or visiting religious and historical sites. To turn these dreams into reality, effective retirement planning is a must.

The Ideal Retirement Lifestyle

Imagine this: you’re exploring new destinations, enjoying nature’s beauty, and soaking up cultural and historical experiences during your retirement years. Whether it’s travelling to exotic locations or savouring the tranquillity of your favourite local spots, your retirement can be as fulfilling and adventurous as you want it to be.

Maintaining a Happy and Independent Lifestyle

Do you see yourself maintaining your current lifestyle even in retirement? It's not just about happiness; it's also about not being a financial burden to your children, comfortably meeting daily and other expenses, and continuing to live life on your own terms. Preparing for retirement ensures you can achieve this.

The Reality of Retirement in Sri Lanka

Let’s get real: many people in Sri Lanka aren’t adequately prepared for retirement. Here are some eye-opening facts:

- Almost 50% of retirees don't have a pension income.

- 85% of people aged 20 to 59 in the private sector aren’t covered by any pension scheme.

- 81% of the employed population don’t have a government-backed pension scheme.

- Only about 19% of the employed population have a government-backed pension scheme.[1]

- Sri Lanka is ranked 53rd out of 73 countries in the Comfortable Retirement Ranking Index.

Given these statistics, it's clear that planning your retirement as early as possible is vital. But where do you start? Here are some tips on how to prepare for retirement to help you get on the right track:

    1. Ensure a Steady Income During Retirement

One of the main goals of retirement planning is to secure a monthly income that will support you throughout your retirement years. This can come from various sources such as Smart Pension Plans[2] , investments, or savings. Think about it: wouldn’t it be nice to have a reliable income stream even when you’re not working?

     2. Build a Fund for Uncertainties

Life can be unpredictable, and having a financial cushion to face uncertainties is essential. A well-structured retirement/ pension plan in Sri Lanka, includes an emergency fund to handle unexpected expenses. It’s like having a safety net – it just makes you feel more secure.

       3. Achieve Financial Independence

Financial independence means you can continue your current lifestyle without financial worries. By preparing for retirement, you can ensure that you won't need to rely on others for financial support. Imagine the peace of mind that comes with knowing you’re financially independent!

        4. Care for Your Loved Ones

A good retirement plan also considers the well-being of your loved ones. By being financially secure, you can ensure that your family is taken care of even when you’re not around. It’s comforting to know that you’ve provided for those who matter most to you.

Preparing for retirement isn’t just about saving money; it’s about envisioning and securing a future where you can live comfortably and independently. By starting early and taking the necessary steps, you can look forward to a fulfilling and worry-free retirement.

Don’t wait-it’s time to find a retirement plan in Sri Lanka!

References:

1. Sunday Times. (2002). Almost 50% of retirees don't have a pension income. Retrieved from [https://www.sundaytimes.lk/020421/bus/8.html]

2. Help Age Sri Lanka. (2008). Tackling Poverty in Old Age: A Universal Pension for Sri Lanka. Chapter 2 Pensions in Sri Lanka: the current situation. International Institute for Applied Systems Analysis. Retrieved from [https://pure.iiasa.ac.at/id/eprint/8707/1/XO-08-006.pdf]

3. U.S. News & World Report. (2023). Best Countries to Retire. Retrieved from [https://www.usnews.com/news/best-countries/best-countries-to-retire]