The Ultimate Guide for Retirement Planning

Retirement is often considered to be the golden years of life as it’s the time for you to stop working and finally enjoy the hard-earned fruits of your labour. However, in order for you to have an enjoyable retirement in the future, you must come up with a retirement plan.
Thinking about the future can be a daunting task, especially when it’s with regard to a financial plan. HNB FINANCE‘s guide on retirement planning ensures you can live comfortably during retirement.

Benefits of Having a Retirement Plan

The biggest benefit of having a retirement plan is that you’re ensuring your future security today. Albeit retirement planning is overwhelming, it is much easier than you think. Fundamentally it has remained the same over the years, at its core all you do is work, save, and finally retire. With that said, there are several changes in today’s world that previous generations didn’t have to face, like longer life expectancies and pandemics that have slowed/stopped growing economies. Here are some of the benefits of saving up for retirement:

• You can plan your investments: after you retire, you no longer have a fixed income, and a great way of generating extra money is to invest With a retirement plan you can set aside
money to invest as well.

• Easier to make pre-retirement decisions: perhaps you want to do a late-career degree or get credentials, if you start saving early it means your future comfort won’t be affected
For instance, you may not have the privilege of making this decision if you’re only 5 years away from retirement, in comparison to someone who is 15 years away.

• You will be ready for anything: sometimes you may have an unexpected expense that you may need to finance during your retirement. Whether it’s to help a loved one or another reason,

you can do so without compromising on your financial security.

When Should You Start Saving?

There is no hard and fast rule on when you should start saving for your retirement, but it’s best to start as early as you can. A key thing to remember is that it is never too early to start saving, but it can certainly be too late. If you start saving in your 20s, even if it’s just LKR 500 a month, it ensures you will have savings which will accrue over the years. You can also keep increasing the value you put into your savings account, which will be even more beneficial. With that said, you can start saving for retirement in your 30s and 40s, however, the longer you wait the larger the sum you will need to take out and save from your yearly savings.

How to Start Saving?

There are two main ways of preparing your finances for retirement: putting money in a Savings Account or investing money in a Fixed Deposit (hereon FDs). Each option has its own set of advantages and disadvantages, but the long-term FDs are more favourable.
A savings account is generally the first bank account that anyone opens to put aside money for the future and is a great option if your financial goal is saving for retirement. At HNB FINANCE we have three savings accounts;a general savings account; Miyulasi, which is specifically for women; and Yalu, a savings account specifically for children.

Some of the benefits of opening a savings account include:

• Low start-up and maintenance requirements, a minimum balance of LKR 250 is needed to maintain the account.

• Easily accessible, you can deposit, withdraw, and transfer money conveniently through our island-wide branch network. You will also have 24hrs access to your account with your HNB

• Savings accounts accrue interest, and at HNB FINANCE Finance we provide the best savings account interest rates as interest is calculated on the daily balance and credited monthly.
A fixed deposit is a more long-term form of saving. To put it simply, FDs are financial investments which guarantee a fixed return after a certain period. This return comes with an
interest that is calculated based on the period of the investment. FDs have a higher rate of interest than a regular savings account, making this a safer investment option.
Here are some of the benefits of fixed deposits:

• Higher interest rates give you more favourable returns. Not only do FDs have competitive interest rates, but HNB FINANCE has the best fixed deposit interest rates which can be earned
monthly, annually, or on maturity. Continually, senior citizens are eligible for an additional 0.5% interest on your investment.

• FDs have a low risk of an unfavourable return if you have the guarantee of a fixed interest rate which means your earnings will not be influenced by external forces like the stock
market, until the end of your term.

• Your deposits, both FDs and savings are insured by the Sri Lanka Deposit Insurance Scheme of up to LKR 1,000,000 per depositor. HNB FINANCE possesses a National Long-Term Rating at ‘A
(lka)’, awarded by Fitch Ratings (as at Sept, 2021) , which is an indicator for secured FDs.

• Depositors are offered low start-up costs with a minimum balance of LKR 500 required to open and maintain an account at HNB FINANCE.

Ultimately, whatever your choice, it’s best to start early to ensure your future is secure and you can truly enjoy your golden years. Interested in finding out more on retirement
planning? Get in touch with us today.