Home » News » Personal Finance»Retirement
Jul 31, 2013, 06.25 PM | Source: Moneycontrol.com

Find out whether your retirement planning is on track

Financial planner and trainer Vivek Sharma presents a checklist to find out whether you are on the right track in planning for your retirement.

Vivek Sharma

Retirement planning is a herculean task. The magnitude of the post retirement corpus requirement is so huge that it cannot be achieved without smart planning. While creating adequate corpus for retirement planning requires meticulous investment strategy, it is equally important to check whether retirement planning is on right time path or not. 

Also read: Find out: 4 common mistakes in retirement planning

With increasing inflation and ever increasing needs, one needs to ensure that neither the creation of corpus nor the timelines for creation of corpus gets missed. In order to watch whether retirement planning is on track or not, there is a need to develop checklist for retirement planning. Here is a checklist to see if your retirement planning is on right path or not: 

You must be owner of the house by 45 

Age of 45 is a critical benchmark for retirement planning in many contexts. One of these is the ownership of the house where you stay. You need to ensure that by the time you turn 45, the house becomes loan free.

This will help you build a good corpus from 45 onwards till your retirement, even if you invest in debt. While there is nothing sacrosanct about this age, you can use it as a benchmark to put yourself in a comfort zone.

In order to ensure this, house where you wish to stay should be bought during initial years of job or starting of profession. One of the important costs in day to day expense management is the cost of rent, in case you don’t own a house. By owing a house, you will be able to take care of this aspect.

Create your health insurance coverage comfort by 45

Healthcare expenses are very high post retirement. You need to build health insurance coverage by a particular age. Buy an insurance plan which covers you up higher costs on health front. For instance, in today’s scenario it won’t be unfair to look for coverage of atleast 25 lakhs for health coverage.

There are many insurance companies which have started providing high insurance coverage now. You need to scale up your insurance coverage so that by the time you reach 45 years, you have adequate coverage.  Healthcare costs can have a killing effect on your financial planning process if they are not managed well.
Your investment corpus should be ten times of annual expenses by the age of 50

This means that if you annual expenses are 5 lakhs per annum by the time you reach age of 50, you should be having a corpus of Rs.50 by this age.  The creation of this kind of corpus will give a comfort and help you build further corpus without taking much risk from 50 years onwards.

This is critical as the risk appetite reduces substantially after the age of 50. This can be achieved by increasing savings year on year and making investments so that atleast 20 percent growth in retirement corpus is seen year after year.

Keep on watching growth in your retirement planning corpus year on year and also check if you are missing any of your milestones that you have set.  Any slippage would require change in strategy. Ensure that you achieve targets always.


Ask the Experts

Get your Personal Finance queries answered

  • Q

    i have been investing in the follwoing MF for the past one year should i contiune or switch to other funds. 1 Axis equity fund direct(g) 2 Axis gold fung direct (g) 3 Birla Sun Life Dynamic Bond Fund - Retail Plan dirct (g) 4HDFC Mid-Cap Opportunities Fund (G) 5 ICICI Prudential Dynamic Plan - Direct Plan (G) 6 ICICI Prudential Top 200 Fund (G) advice if i have to switch, all are for long term


    All the schemes look fine and you may continue. The amount that you invest in respective schemes is not known, so just make sure you have al...

  • Q

    i want to investment in 60 lacs invest in mutual fund and i accept 16 percentage return per year my goal after 10 years 2.80crs what is possible please true guide


    Equities over a long term are expected to give a return of 14-17%. Sensex has given a return of approx. 17% since inception i.e 1979-80 till...

  • Q

    Iwant to invest rs10l free of risk ! Shd i go for bank fd's or as the bank suggest " guaranteed income plan" ? Please guide .


    Yes bank returns are fixed....

  • Q

    My daughter 18 yrs. old is studying at IIT Madras for engineering. She is a tax payer in the 20% slab. I wish to get her a LIC policy at an early age. The agent recomends JEEVAN ANAND from LIC of India. Kindly advise the best options.


    Hello, Jeevan Anand is a with-profit plan by LIC which has an insurance component as well. It is always recommended not to mix insurance and...

  • Q

    I am 40 years old working in private company. Want to invest open ended fund Rs. 2000 per month. Kindly suggest


    The scheme that you should invest into would depend upon your time horizon. If you can stay invested for long term ( 7 yrs + ) then you shou...

  • Q

    I am planning to invest a lumspum of Rs 10000 in Mutual Fund for 2 years horizon. Please suggest me some good funds which will provide me maximum returns. I am ready to bear the risk. Would appreciate your advises. Thanks


    For a period of 2 years, I would suggest that you invest in a dynamic bond fund. However, since you have mentioned that you wish to take ris...

  • Q

    Dear sir/madam i am Dhananjay Surve from mumbai .I have got placement through my engineering college and working sience last 2 months .Ia am 22 years old ,i s investing in sip is good for me .As iam looking for time period of 3 to 5 years from now for investment ,which will be the best fund and what other investment option will be best .i am looking for 2 to 2.5 k per month investment.


    Invest the entire amount in a balanced fund. Its a good way to get an understanding about mutual fund working and investments. Invest in Tat...

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.