The unpredictability of life is as surreal as it is certain. One can never be prepared for things that are to happen in the future, especially when we are old and incapable of earning for ourselves. This is what makes it inevitably important to have a good retirement plan in place, so that we can rest assured we have something to fall back on, even after giving up our jobs and a regular source of income.
Importance of Retirement Planning
Gone are the days when one had to slog for his entire life, till s/he turned 60. Today, with retirement planning, one can relish the taste of early retirement, if appropriately done from the beginning.
Retirement planning entails the systematic accumulation of a set amount of money for a specific future date. The idea is to save an amount that shall be sufficient to sustain you and your dependent partner. Besides this, these funds should be enough to meet your medical requirements as well as your travel expenditure over a period of time. Only then can you enjoy what they called the ‘retired life’.
There is no denying the fact that almost everything costs money and it is only wise to prepare for the times to come if you don’t intend to end up in old age homes paid for by your children. Financial independence after you have reached a certain age in life and decided to give up work or good is important, otherwise, you won’t be able to enjoy the rest of your time.
However, most of us fail to do so because for the greater part of our lives we are stuck in a rat-race of hand-to-mouth existence ad never have spare money we could imagine saving.
Start Young!
Ideally one should start retirement planning with their first-ever salary check. This is going to keep things in perspective from very early on, and you will know what to expect from your life in the time to come.
Parents should inculcate these ideas in young minds so that they as well as their children can have secured retired lives.
It is essential that we consider all factors and start paying attention towards retirement planning today because putting retirement off is only going to make it more and more difficult in the future.
You will not be able to save sufficient funds to support your dreams and goals. You may want to lead a comfortable life with your pets or may want to travel the world, all of which is going to be possible because you have preplanned your retirement intelligently.
How to Go About Efficient Retirement Planning?
- Evaluate your income and expenditure as well as your retirement goals
- Know how much you need to fulfill those goals as well as live a financially independent life, in short, know your retirement corpus
- When long-term planning is concerned, especially for your golden years, you can opt to invest in inequities. SIP in equity mutual funds suits the puzzle here. SIP mode inculcates an investing discipline in you, which equally contributes to the compounding effect, helping your returns to grow. Go for retirement plans that are best suited as per your needs. Being invested in a retirement plan can help you retire as early as possible, maybe in your 40’s or 50’s
- Lastly, making retirement planning as much of a priority in your life as anything else, making conscious efforts towards securing your future
Why Do You Need Retirement Planning Now More Than Ever?
Inflation: We are amazed when our parents tell us how a bar of chocolate used to cost a fraction of what it costs today. So, imagine what it is going to cost when we become grandparents. Inflation has made it even more important for one to become financially secure and prepared for the times to come.
Around 6.5 percent long-term inflation sustains in the country, and if predictions are to be believed, it is only going to get worse from here on. This makes retirement planning one of our key responsibilities towards ourselves so that we don’t end up becoming a burden for anyone in our twilight years.
Life Expectancy Rise: Life expectancy of an average individual has increased over the past decades, and this too raises the need for retirement planning. One cannot rely on provident funds or fixed deposits that they make. It is essential that you save money step by step and in a streamlined, strategic manner so that you can live a comfortable life in your older years.
Current Family Scenario: The way modern families and relationships are shaping; nuclear families are on the rise. This makes it all the more imperative for a person to be retirement ready so that in the years to come you are prepared enough to deal with any sort of situations.
Rectify These Retirement Planning Mistakes Today!
- Saving without proper plans and goals in mind
- Making savings only through fixed deposits or PPFs
- Drawing from your retirement funds because of immediate need of money
Putting it off for a better time, focusing on current responsibilities