How long will you postpone retirement planning? You may be around 25 to 35 years of age, but you must set aside money for retirement. Time flies and once you reach the 50s, you’ll hardly have the time and resources to plan a happy retirement.
You want to have an independent and fulfilling retired life. You wouldn’t want to depend on your children in retirement, for money. You need a robust retirement plan to enjoy a happy retired life.
Want to know more on Retirement Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
Ask yourself, when you would want to retire. This is the first step of retirement planning.
SEE ALSO: Types of Retirement Plans
1. Start today. Out of whatever little you earn in your young age, make it a point to divert some money for retirement.
2. Do not dip into your retirement savings. Retirement may seem far away, but it demands equal financial security. Therefore, do not dip into savings, instead increase contributions.
3. Consider inflation. Say you spend Rs 5 Lakhs a year now when you are 30 years away from retirement. How much will you need after 30 years to maintain the same standard of living? Consider inflation @7% per year.
Use this formula to calculate how much you need to maintain the same standard of living after 30 years:
FV= PV (1+r) ^ n where
FV= Future Value
PV= Present Value
R= Rate of interest
n= Number of years for retirement
FV= Rs 5,00,000 (1+0.07) ^ 30
FV= Rs 38,06,127.52
Therefore, you will need approximately Rs 38,06,128 a year to maintain the same standard of living, 30 years from now.
4. Increase your retirement savings each year. Every year you get a salary hike. But, the hike is eaten up by inflation. Also, with increasing income, your standard of living also increases. Therefore, be sure to curb unnecessary expenses and divert the same money to retirement funds.
5. Do not rely solely on social security schemes. Currently, EPF offers a good rate of return. It currently offers 8.55%. But, is it enough for retirement?
6. Calculate how much you need and choose investments wisely. VPF is an extension of EPF. You’ll earn the same rate of interest as EPF. PPF also gives good returns. Therefore, make sure you invest in other retirement schemes.
Your retirement is in your hands. Therefore, plan well and live well! There are a number of retirement plans in India which help you save, invest and plan for retirement.
Be Wise, Get Rich.
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.