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  • Writer's pictureAkshay Nayak

Life Beyond Financial Independence

All of us plan and strive hard to achieve financial independence. With disciplined and consistent effort, it is definitely achievable. But most of us do not think about life after financial independence. Financial independence gives us enough time, money and options. But we cannot step into financially independent life being unprepared. Doing so may leave us feeling unfulfilled even after we have achieved financial independence. So today I'm going to talk about simple steps to ensure that we live a fulfilling life after financial independence.

Before stepping into financially independent life, we must understand what it really looks like. Therefore we may take a year's sabbatical once we achieve financial independence. It allows us to simulate financially independent life. We will then know whether it is as rewarding as we thought it would be. Doing this would benefit those who have a clear vision of they want to do post financial independence. It would allow us to do what we had always wanted to do in our lives. Time and money would no longer be a factor. Those who have no clear vision of what to do can use the time to figure this out.

Those who still feel unfulfilled after the sabbatical can continue working until they figure out what they want to do. Taking a sabbatical before financial independence therefore has clear benefits. Some other benefits of taking a sabbatical have been laid out in the graphic below.

Those of us who do decide to stop working need to take care of a few things. The first of them is the adequacy of our health insurance cover. Throughout our career, our health insurance is largely taken care of by our employers. Moreover, corporate health cover usually covers our parents and families too. Therefore, we may not focus on our health insurance needs during employment. But the situation changes if we do choose to quit after financial independence. This is borne out in the graphic below.

Therefore, before quitting our job for good, we must ensure that we have adequate health cover for ourselves outside our corporate cover.

We may purchase such health cover at least 5 years before we plan to retire or quit our job. The waiting period for pre existing diseases with most policies is between 2 and 4 years. Therefore, the waiting period would lapse exactly around the time when we retire. It is always best to purchase a family floater plan with comprehensive critical illness cover. Those living in large cities would require health cover of Rs 10 - 15 lakhs. Those living in smaller cities and towns would require health cover of Rs 5 - 10 lakhs. Doing this much would holistically provide for our health insurance needs.

The next thing to take care of is our life insurance needs. Post financial independence we may review our life insurance needs. We purchase life insurance for our families. It allows them to replace our income in the event of our death. Post financial independence, our families would no longer be dependent on our active income. Therefore the very need for life insurance gets negated. In such a case, life insurance policies can be terminated. The money that would otherwise flow out as insurance premiums can be invested elsewhere.

When we retire, we must ensure timely and efficient disbursement of retirement benefits that are entitled to us. We must ensure that we keep the contact details of key figures within our organisation. This especially includes our immediate bosses and HR managers. This would be helpful when we track the disbursements of our retirement benefits. We can always check back with them with regard to the disbursement. Any issues or hold ups in the disbursement process can also be brought to their notice. This allows timely corrective action to be taken.

The transition into financial independence can be immensely satisfying. But it is one that must be made after adequate forethought. We must begin financially independent life with the right understanding. Achieving financial independence does not mean we stop working right away. It just means that working becomes an option, not a necessity. Taking the decision to stop working has its own responsibilities as discussed above. These responsibilities must be met diligently. Only then would we live a fulfilling life post financial independence.

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