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Are you prepared for your retirement?

How to make your post-retirement life worry-free by making firm retirement planning today

Tips to plan your retirement to maintain the same lifestyle that you lead now even after your work life ceases


 Do you know the importance of planning for your retirement even when you are young? Most of us forget the fact that our life will not work out the way that we planned and do not give much thought for the habit of saving for the future. The average life expectancy of people continues to rise makes it an important reason for retirement planning. People are now live longer than before and require more retirement funds for a comfortable life. You will no longer receive a regular income or salary once your work-life stops. A good financial back-up can sustain your daily expenses and continue to live the same golden years during your work life. So, effective retirement planning is necessary for you to enjoy a blissful life with sufficient money even after your paid work-life is over. Read this article to get an idea about how to plan for comfortable and peaceful retirement life.

Retirement planning

Everybody needs to plan well for their future once their paid-work life ceases to exist. You need to start your retirement planning well before you retire. Since it is a long-term goal, proper planning is required to ensure the same lifestyle that you have led during your work life. Retirement corpus is the best investment for an individual to sustain during his or her long years of retirement life. Careful analysis and planning are required for starting this investment.

  • When should one plan for retirement investment?
    As per the opinion of experts, you should start your retirement planning from the very first day when you start earning. Remember, any time is good for you to plan for your retirement.
  • What are the points to ponder on while planning for retirement?
    The trickiest part of planning for your retirement is to calculate the expenses after your retirement while keeping the inflation in mind.

Need for your retirement planning

Many youngsters think that their retirement occurs only after many years, but it is a reality for everybody.  They need to plan it ahead for a worry-free post-retirement life.  A proper retirement plan is the best way to maintain the same standard of living and comfortable life even after you stop earning. You can also retain your financial independence by planning for your retirement ahead.  If you are independent financially, you can turn retirement the best phase of your life. You can relax and enjoy life if you plan for your retirement even from today.  It is the right time to reap the benefits of what you have earned for many years of your hard work. Take a look at the best reasons why you should plan ahead for your retirement for achieving a tension-free retired life.

  • An important reason for planning your retirement is that you cannot work forever. The income and security that come from your work life is temporary and does not guarantee an income once the job life is over.
  • An individual will be financially independent without the worries of money if he or she plans for retirement.
  • The money that you save during your paid work-life accumulates to a large corpus by the time you retire.
  • Your habit of early investing instills financial discipline in you.
  • A firm retirement plan will help you not to become a financial burden on your family.

Benefits of retirement planning

Several benefits are there for planning your retirement early that range from financial to personal. You must have a clear idea of the amount that you need to save every month for your retirement to meet your financial goals. After the advent of the internet, one can calculate that amount within a few minutes online free of cost. Here are the best benefits of your retirement planning.

  • Planning ahead reduces your stress and makes you tension-free during your retirement. The lack of retirement planning can create stress and leave a cloud of uncertainty.
  • You can plan your finances for the years that come after your retirement practically.
  • Those who take time for their retirement planning early on can make more effective general and career-related financial decisions with appropriate planning prior to retirement.
  • An early retirement planning gives more time to your money to compound.
  • Tax benefits are another great advantage of retirement planning.
  • Your retirement corpus certainly helps you at all the stages of life and makes you independent financially.

How can you plan your retirement?

There is no need to worry about your retirement life if you have a firm post-retirement plan. What you need to do is to calculate the money that you will require to grow your fund for guaranteeing a hassle-free and smooth post-retirement life. Many people fail at their retirement planning and one of the main reasons for this is their late starting. So, start planning early for a peaceful retirement. The first step for your retirement planning is to decide your retirement age. Life expectancy rate is an important factor to decide your retirement age. Your income flow will stop or reduce considerably at this age, and you depend mainly on your investments and savings for meeting your retirement needs. It is also significant to determine your retirement corpus to meet your expenses and lead the same lifestyle during your work life.

Take this example for how to decide your retirement planning.

Meenakshi is a 32-year-old woman with a life expectancy of 80 years. She wishes to retire at the age of 60 and now drawing a salary of Rs.8, 00,000 per annum. Meenakshi needs a monthly income of Rs.50, 000 after her retirement. In this case, she needs a corpus of Rs. 8.80 Crore to get a monthly income of Rs. 50, 000. With annual income required immediately after Retirement Rs. 39,89,303 (Approximate Forty lakh). We can assume a 12% long-term return till she reaches 60 and after than 6% with inflation rate of 7%. Based on these factors, she needs to invest Rs. 32, 199 every month for the next 28 years. If she can plan her retirement like this, she can lead a secure and financially independent life post-retirement.

Mutual funds for a secure retirement life

Retirement planning is essential for those who work in the private sector, self- employed or Govt sector. All have to plan for their retirement on their own for having the quality life once they cease to earn. Mutual funds are one of the best investment solutions for them to meet their financial goals and beat inflation. This investment option can build excellent returns in the long run and generate a large corpus for your life after retirement. You can find different funds to choose based on your financial goals and retirement needs.
Calculating the retirement corpus helps you to choose the right fund that meets your financial goals after retirement. It helps you to understand the amount you need to invest in a lump sum and through SIP. For getting an idea about your retirement corpus, you need to calculate your monthly expenses first and inflate it with the inflate rate till the year when you retire. It helps you to estimate the inflation-adjusted expenses at the time of your retirement. You also need to evaluate the present value of the cash flows take place in the future with your life expectancy and the actual rate of return. The value that you got is your retirement corpus, and you can assess the lump sum required and the monthly SIP based on it. Considering the risk profile and the investment tenure, you can select the best mutual fund asset class that suits your financial goals.

Other long-term investments to consider for a bright retirement life

You will be able to enjoy the same lifestyle that you are enjoying now if you plan properly for your golden years. One of the great advantages of choosing a mutual fund scheme for your retirement is that its investment plans can beat inflation. Apart from mutual funds, you can find some other investment options that make you independent financially post-retirement but these plans cannot beat inflation. Invest in different schemes as a smart investor to diversify your portfolio, and to make the best out of your overall investments. Here are other options for retirement planning.

  • National Pension System (NPS)
  • Atal pension Yojana (APY)
  • Pradhan Mantri Vaya Vandana Yojana (PMVVY)
  • Public Provident Fund (PPF)
  • Annuity Schemes

You need to start your retirement planning today, not tomorrow. Your retirement planning helps you to be independent financially once your work-life ceases, and put yourself in a comfortable situation. Decades may take to accumulate your funds to a huge corpus for a comfortable retirement, depending on your income. Investing in mutual funds can be the right decision for comfortable retirement life as your funds will grow over time. You can acquire substantial fund to enjoy a relaxed life and fulfill your retirement dreams through your early retirement plans. It is the best time to make savvy investment decisions for your retirement life. Let your hard-earned money work for you for a relaxed and tension-free life after retirement.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”,  so let me do Nivesh