Have you started planning for your retirement as yet? Financial planners have always stressed on saving for retirement from the day you start working.
As per experts, if you start planning for your retirement early, say in your 20s, you can save and invest a considerable amount and make the most of power of compounding. In this case, by the time you retire, you will have a huge corpus saved for your retirement days.
So, how to get started? One of the first steps while planning for retirement is to identify a serious figure you would require to maintain your current lifestyle and expenses in the post-retirement phase.
You should take inflation, medical expenses, liabilities, standard of living, future goals, etc., and start saving and investing accordingly. For instance, if you aim at Rs 10 crore as your retirement fund, it is advisable to save and invest as soon as your start earning and increase your investments as your salary grows.
You can achieve the desirable figure through right asset allocation such as equities, PPF, and mutual funds. Since it is a long-term investment, you can look at risk-reward ratio and take risks to create wealth over a period of time.
But, if you are in your 40s or 50s and has just started planning for retirement, it’s never too late. You can start retirement planning at any age but it comes with its dos and don’ts. All you need is a concrete financial plan.
In your 40s and 50s, you should focus on earning more, spending less, keeping realistic goals and risking more. You can invest more in equities and have one or two traditional investment in your portfolio.
You can build a huge corpus for retirement with financial discipline and right approach. Even though it is advisable to plan early, it’s never too late. You should have the right mix of asset allocation and take risks depending on what phase of life you are in.
If you want to start early, you can start small and increase the investments gradually, depending upon your retirement goal.
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