Retirement planning is very important as it takes care of your post retirement days and help you to lead a stress free and blessed life.
Retirement Planning is an essential part of Financial Planning. A financial plan is a comprehensive plan which covers 360 degree of your investments and safety needs. Thus a Financial Plan covers Retirement planning too.
Retirement planning essentially calculates the future corpus required to generate inflation linked passive income (increasing annual income),how much you need to invest to accumulate that much corpus and if you are likely to meet your goal and let you know timely, if any shortfalls with your current investment.
It also makes additional provisions to reach the desired goal. A Retirement plan also takes rental income, your retirement benefits into account.
Table of Contents
Why is retirement planning important?
Imagine your life today, what if you do not have adequate money to live a normal life. How miserable you feel at such a time.
Now, just relate such a situation in your post retirement days – when your earning capacity is already depleted and you do not have adequate money.
I am sure you would not like to have such a situation in your life. Retirement Planning comes handy to solve such a problem in your life. It’s better to plan Retirement in time so that you do not feel the pain later in your life.
BestinvestIndia guides individuals to plan their Retirement. It creates a personalized Retirement Plan( to cater individualistic needs) and monitors it periodically to ensure the investments and future planning is right on track.
Does Retirement Planning same for everyone?
We all are unique individuals and have our own unique circumstances and different requirements. A regular income might be your only need but the other person may require to leave a legacy and the other person wants to have a world tour after retirement. Therefore, Retirement Planning is à personalized plan and is prepared separately for each individual based on his or her requirements.
The reasons -why Retirement Planning is important
- Due to medical advancement there is an increase in average life expectancy and one needs to ensure that there is smooth inflow of money in your post retirement days .
- Do not want to depend on children for income needs
- We cannot work forever
- Increasing nuclear family culture
- Children move abroad or work other places
- Rising inflation
- Increase in lifestyle related expenses
- one source of income might be risky and you cannot rely on one income
- Increase in medical cost
- Increased health related cost such as extra help for supporting work.
How to start Retirement Planning
Early planning can help you to accumulate a sizeable Corpus without investing too much money.
Know the time left for Retirement
Only you know when you wish to retire. You want to retire at the common age of 60 or you want to retire early First step is to know the time left for your retirement.
Current monthly expenses
Know your current monthly expenses. You may reduce it to 80% for your post retirement days. Now calculate your inflated post retirement expenses. For instance if your current expenses are 50k than after 30 years your monthly expenses might increase to 3.30 lac.
Know Retirement proceeds from your job/business
Before calculating any amount you need to subtract the retirement corpus you may get from your employment.
Calculate your monthly and yearly investment amount
The final step is to calculate the SIP amount you need to start to accumulate retirement corpus. No worries if you cannot start with a high amount right now.
The key here is to at least start investment. You will get several chance in future also. You might increase your SIP investment periodically or on annual basis. You can also decide a certain amount and invest this amount on yearly or any time basis.
Review & Monitor
Periodical Review and monitoring is a must to meet your desired corpus. In other words you can say it is the lifeline of your entire planning. It is wise to review the plan on yearly basis at least.
Additional resources
- How to plan Retirement in India
https://bestinvestindia.com/how-to-plan-for-retirement-in-india/
7 Effective steps to Financial Independence Retire Early (FIRE)
https://bestinvestindia.com/7-effective-steps-to-financial-independence-retire-early-fire/
Financial Goals-Why you should set up financial goals
