Everyone wants to be free from financial worries after retirement. But just thinking about it isn't enough; making the right investments at the right time is crucial. If you want to be able to easily meet your expenses in old age without having to work, don't take retirement planning lightly.

Many people neglect it during their early years of employment and regret it later. Even those who do plan often make mistakes that increase their difficulties in retirement. Let's explore five such major mistakes that everyone should avoid.

1. Relying solely on EPF

Most people believe that their EPF (Employees Provident Fund) is sufficient for retirement. But this isn't true. The interest rates on EPF are set by the government and don't always remain high. Today, there are many better options in the market that can offer higher returns, such as the NPS (National Pension System) or mutual funds. Therefore, if you rely solely on EPF, you may experience a shortage of funds at the time of retirement.

2. Not Transferring EPF After a Job Change
Many people don't transfer their EPF account from their old company to the new company after changing jobs. This leaves their funds idle for a long time, resulting in a loss of interest. If you're also changing jobs, be sure to transfer your old EPF account to the new company first. This will allow your balance to grow, and you'll continue to receive interest benefits. It's worth noting that EPF funds that remain with your old company stop earning interest after three years.

3. Starting Savings Late
People often think that this is just the beginning of their career, and they can save for retirement later. But this thinking is the biggest mistake. The sooner you start investing, the greater the benefits. For example, if you invest ₹5,000 every month at the age of 25 and earn a 10% return, your corpus could reach ₹1.9 crore by the age of 60. However, if you start the same investment at the age of 35, the amount will decrease to ₹65 lakh. This means that starting early means greater benefits.

4. Considering 60 as the retirement age
Most people think that they should retire at 60, but this is not necessary these days. People now prefer early retirement so that they can take time for themselves or start another career. If you start preparing for retirement early in your career, you can retire at 55 or even 50 and live comfortably. The earlier you plan, the sooner you achieve freedom.

5. Ignoring Inflation
People often don't consider inflation when planning for retirement. ₹1 lakh today will be worth only ₹25,000 in 25 years. Therefore, when planning your retirement fund, always factor in inflation. If you spend ₹50,000 per month today, this could reach ₹2 lakh in 25 years. Therefore, invest more than you think you should so that you can live comfortably after retirement.

Conclusion
Preparing for retirement isn't a one-day task. It's a long and thoughtful process. If you want to avoid being dependent on anyone in your old age, avoid these five mistakes. Start early, choose the right investments, and plan your retirement with inflation in mind. Remember: "He who saves today is safe tomorrow."

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.