February 01, 2010 / 16:29 IST
Retirement planning is a process of establishing retirement goals and working out allocation of finances to achieve these goals. This process, if properly followed, can go a long way in ensuring the right level of preparedness required for a dream retired life.
While it is a well known fact that we need to save to build a retirement nest egg, many of us fail to do so. No wonder, we often get overwhelmed by the thought of retirement and end up wondering how we will ever generate the huge amount of money required to lead a happy retired life.Many of us face this dilemma because we consider retirement planning as a single event rather than considering it as a life long process. If we save and invest regularly over the years, even a small sum of money can suffice for this purpose. The key, however, is to start investing early as the real power of compounding comes with time. Unfortunately, few young people look that far ahead. Another challenging aspect of retirement planning is to calculate how much we will need to support ourselves and our dependants. As a thumb rule, one requires around 75- 80% of one
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