Unfiltered Advice on Retirement, Insurance and Personal Finance

From unrealistic retirement goals to the implications of starting smoking after purchasing a term insurance policy, financial queries pop up in our lives every now and then. Here we have compiled a handy list of finance insights shared by Abishek Singh, founder of one insure, with nearly two decades of industry experience. So let's dive in!

Key Takeaways

1. Setting realistic financial goals is crucial. The income, potential savings, and expenses are some of the fundamental aspects to consider.
2. After purchasing insurance, lifestyle changes do not require conveyance to the insurer. Be aware that any health condition caused by smoking will not be covered, even if disclosed.
3. The journey to reach the so-called 'Coast Fire' number, point in life at which one doesn't have to worry about retirement, requires careful planning, a lot of saving, and sensible investing over many years.

Setting Retirement Goals

Everyone dreams of retiring early, leading a comfortable life without financial worries. But it's important to:

• Calculate the financial requirement considering factors like lifestyle, income level, age, and residence.
• Take into account any future income regardless of an early retirement.
• Consider any assets or potential income sources such as Employee Stock Ownership Plans (ESOPs).
• Adopt disciplined saving and sensible investing for many years.

It's essential to revisit a retirement plan regularly and make adjustments as needed.

Navigating Term Insurance

In the realm of term insurance, there are a few essential things to remember:

• Any lifestyle changes post purchasing a term insurance policy do not require disclosure to the insurance company.
• Smokers quit for at least two years before purchasing a ‘non-smoker’ policy.
• Health insurance doesn't cover any illnesses caused by smoking, regardless if it’s disclosed at the sign-up.
• Consider three separate policies to cover outstanding loans, children's education, and household expenses, each with different terms depending on the period needed.

The 'Coast Fire' Concept

The 'Coast Fire' is the financial state at which enough is saved that, if left untouched, will grow into the necessary retirement corpus. To reach this:

• Estimate the monthly expenses for a desired lifestyle.
• Calculate the required corpus and by what age it needs to be achieved.
• Save and invest diligently to accumulate the corpus over time.
• Avoid financial obligations like loans and focus on saving more.

Framework for Financial Security

Here is a simple framework to follow for financial security:

1. Recognize financial goals - be it retirement, vacation, or children’s education.
2. Assess income, savings, and expenses thoroughly.
3. Develop a savings and investment plan aimed at achieving the goals.
4. Purchase suitable insurance policies to secure financial plan.
5. Regularly revisit and adjust the plan according to changing circumstances.