Presented byPooja Bhambhani

Plan In Advance For A Peaceful Retired Life

While all of us seek a retired life with adequate financial support , most fail to plan for it in advance.

Some believe that children would look after them ; some believe their savings or investment in house , gold would be enough while some leave it for the last minute.

With our living and medical costs increasing at a frenetic pace , it is difficult to estimate the expenses to sustain our lifestyle in the sunset years. Hence, it is crucial that we begin to financially plan for retirement early in life. Today, key determinants of one’s retirement corpus are inflation , that can erode the value of our investments , and higher life expectancy.

Four steps that will help you

save for sunset years 

The biggest benefit of starting early is the power of compounding which works best across longer time horizons.For example , if a 25-year old individual wants to retire at the age of 60 and wants to accumulate a Rs 1 crore corpus , he needs to save around Rs 2,635 per month at an annualized growth rate of 10%..

1. START EARLY

However , the monthly investment increases to Rs 4,430 and to Rs 7,540 and Rs 13,170 if the start is delayed by five,10 and 15 years , respectively.Thus , the sooner one starts investing , the better.

The investor’s age is important when considering the mode of investment . Opting for investments with guaranteed returns - may be a safe option for someone nearing retirement but not for a young individual whose risk-taking ability is high.

2. INVEST ACCORDING TO THE

LIFE STAGE:

A younger person is relatively well placed to invest in high-risk high-return asset classes such as equity , which tend to give superior returns in the long term.

Investing via systematic investment plans (SIPS) in equity mutual funds would be best way to look at equity investments.

This includes : risk profiling identifying all your financial goals , including retirement andpreparing a cash flow statement

3. FOLLOW A SCIENTIFIC APPROACH:

It helps to identify the retirement corpus after taking into consideration inflation, life time goals and returns on the investment portfolio.

One must regularly revisit ones portfolio to ensure that underperforming instruments are weeded out while ones risk profile tallies with the asset allocation that is being followed .

4. TRACK AND REBALANCE PORTFOLIO: 

With the increase in life expectancy levels and the nuclear family system , it becomes ever so important to plan for a financially independent lifestyle post retirement.

And an individual should fortify his retirement planning by following the principles of financial planning.

SUMMING UP: 

Thank You