We Indians are notoriously bad with money, which is perhaps why we avoid talking about retirement. Most of us have wasted a lot of time daydreaming about our retirement and freedom from the daily grind. When we think of a blissful retirement, we see ourselves relaxing and not having any obligations. When the time comes for us to retire, however, only a handful of us will be able to enjoy such a comfortable lifestyle.
India’s population of people aged 60 and older is predicted to reach 323 million by 2050, according to the World Population Prospects report published by the United Nations. This figure will be higher than the whole population of the United States in 2012. The importance of planning for one’s retirement years is growing as the social landscape shifts from joint to nuclear family structures. Most Indian middle-class people expect to enjoy the finer things in life after retirement, but they have never prioritized saving for it. The retirement years are the crowning achievement of a lifetime of hard labour. But it’s difficult to accept that we don’t have a pay check or other source of income anymore. We should therefore plan for retirement far in advance when it comes to our finances. These are a few things to think about.
A larger pension payment can be expected in retirement if one plays the long game. You don’t have to sacrifice your current quality of life in favor of longterm financial security. It necessitates making a conscious decision to be frugal with your money, when you save, invest, and spend. A well-rounded retirement strategy is as crucial as a healthy diet to ensure a happy and fulfilling later life. The 50/30/20 rule of thumb is a solid long-term budgeting guideline.
The necessary expenses, such as a mortgage, rent, energy, and food, should receive 50% of the budget.
It is recommended that 30% of your income be spent on leisure activities such as traveling, shopping, and health care. It’s recommended that the remaining 20% be used toward retirement, savings, and investments. The lower your debt, the more money you have to put toward investments. Minimize your debt. Review your credit card bills for purchases made for shopping, entertainment, and vacation to see if any can be cancelled or decreased. See that your pension statements are in order. It’s possible you’ll want to beef up your retirement savings or start investing more for the long haul. Have enough cash on hand for unplanned expenses.
Are you aware of the amount of money needed for your retirement? Use https://www.investonline.in retirement calculator to determine the amount you require to maintain your present lifestyle.
A few significant retirement planning strategies are listed below: It’s crucial to pick an investment early on that will pay off in increments as needed throughout one’s life. Investment levels can be increased as the career trajectory progresses. When your income rises, you should always raise your investments. As time goes on, we feel the effects of the rising expense of life in India. Thus, you should start saving and investing as soon as you can. If you start saving for retirement when you’re young, you’ll have more time for your money to grow and more money to withdraw when you retire.
Putting a certain share of one’s income into one’s main retirement corpus is a sound strategy. It’s also important to avoid tapping into the corpus (the primary sum) before retirement.(Courtesy: The Financial Express)