Thinking about Retirement Planning

Written by Vidya Kumar

September 25, 2012

PictureIf you fail to plan, you plan to fail !

While one is young and working the thought of retirement never troubles us. It’s a distant event that will never touch our lives, right? Of course we all know that’s not true. No matter how much you love your work or how well you’re paid, one day you’ll have to apply the brakes and call it quits. But why should this seemingly nostalgic activity be a topic of discussion now? Well, that’s because the rising life expectancy these days—especially in the modern cities—made sure that the average person spends a good amount of his life post retirement. Because you won’t be able to earn anymore at that time, it makes sense to start planning for that day right now. Here are some important points to help you get on the right track.

  • It’s never too early: No matter what your age, start right now to plan for your retirement. You might think that there’s plenty of time for that, but believe us that if you postpone it just once, you’ll be surprise how you never got around to doing it. If you’re still too young or are studying, you might want to ask your parents to start investing for your retirement! Highly irregular, we agree, but a very good idea nevertheless.
  • Work out an amount: Think about what kind of life you want to live after retirement. Based on that and the number of years left, work out how much you need to start putting away each month. Also factor in your present liabilities, and the fact that healthcare expenses in the old age are considerable. The calculations involved are bit complex so best will be to consult your Financial Planner.
  • Watch out for inflation: Money loses value over time, don’t forget that. Ten thousand rupees today will be worth say nothing thirty years from now, so don’t think that just by putting money in a box you’re going to be safe. You’re better off putting your savings in a safe investment vehicle, to make sure that your money is helping you grow on its own.
  • Stick with it: Once you have made a commitment to the amount you want to save, you need to stick with it no matter what. There will be times when you are down and out and feel like taking from your retirement fund – Don’t fall into that trap. Realize that post retirement you will be in no position at all to earn any money, so you can’t gamble with that investment. The best way to do that is to treat your retirement fund as if it’s nonexistent. If you need money urgently, better borrow from a friend or arrange from it from somewhere else. The same goes with your fund payments – Never default on your regular fund contribution or it might become a habit. For this purpose, PF and NPS contributions are good as they don’t allow withdrawals easily and have many restrictions in place.

Retirement planning is all about thinking ahead and maintaining discipline. Once you’re there you would have crossed the point of no-return, and your hard-earned savings will be the only cushion against bad times. 

Financial Planners specialize in such planning and taking their assistance may turn out to be very helpful for you. 

Team “Getting You Rich”


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