Retirement is quite an emotional event in one’s life. With ever changing working environment and technologies most of the professionals are choosing to retire well before 60 years of age. With increasing life expectancy reaching 80 years you will have close to 20-30 years post your retirement to take care of. Let us look on how you can plan for retirement with different investment options available to you while you still are working-
- Start planning early – You need to plan early for your retirement. This will give you a time interval to plan your future income and expenses. For example if your current age is 30 years and you plan to retire by 50 years of age, then it is perfect time to start now for retirement and look for different investment options. More time you give to yourself for retirement, better it would be for your retirement planning.
- Track your monthly expenses – You should start tracking your expenses the day you decide to plan for retirement. You should track your regular expenses like regular bills, food, transportation etc .This list should also include expenses that you would not incur after retirement like child education, marriage, shopping etc. Some of the expenses like medical insurance would incur after your retirement.
- Adjust for inflation and longevity – You should adjust your income for inflation. In India, inflation is a constant threat to all your income. An inflation rate of around 5% to 8% is a regular phenomenon. We are living in a generation whose life longevity is increasing with each decade. Currently, India has a life expectancy of around 66 years which is expected to increase in future. You should add remaining years post your retirement to get a clear picture about how much you save for hassle free post retirement and start looking for investment options to compensate for it.
- Start investing – You should start looking for investment options from the day you plan for your retirements. If you are currently in your 20s or 30s then you can start investing in Equities and mutual funds. But, investing for retirement is quite different from investing for wealth accumulation. You should be careful in investing for retirement and start investing in safer investment options like NPS, EPF, Bonds etc.
- Use retirement calculator – You can use online retirement calculator to calculate how much you would need after retirement to lead a comfortable life. Online retirement calculators would factor in your variables like current age, planned retirement age, expected monthly expenses, expected longevity, inflation etc to calculate amount of fund that you would need post retirement to lead a comfortable life. Advantage of online calculator is that all the information would be calculated for you by calculator itself.
- Invest in a hobby – It has been seen that after working for close to 30-40 years suddenly a break in in this routine leads to a negativity and depression among individuals. A retirement planning is incomplete if one doesn’t know what to do post retirement. For this purpose, you need to develop hobby or activity so that you can spend your time judiciously. You can also invest your time in some social activity to fulfill your long held dream of giving back to the society and help the needy one.
A retirement should not be an event that comes as a surprise rather it should be completely planned event that come as a pleasant new beginning. A retirement should not be an end to one’s working life but should be a start to something invaluable in life. In current modern age of plethora of investment options available to you, you should start planning for retirement from the day you choose a year for retirement.