HOW SHOULD YOU PLAN FOR RETIREMENT?

Introduction:

Early retirement planning is still a relatively new concept in India. People who reside in cities and villages still rely on their offspring after retiring, if we ask them. Some retired public sector workers can rely entirely on their children, while others can bank on their pensions.  They don't even consider the possibility of early retirement planning.

How to plan for retirement in India?

Here is a guide to early retirement preparation in case you are now convinced about the idea but are unsure of how to proceed.

Early Start:

Time is money holds true for investment goals including retirement planning as well. This is because the amount you need to save amount every month to reach your goal will depend on how much time you have to achieve the goal. It means you can reach your retirement goal with much smaller monthly savings if you begin early.

However, the delay will ensure you have to save more every month.

Start investing early to reach your retirement goal comfortably, with comparatively less savings as well as less stress. The early starter also gets exponential returns due to the power of compounding.

You should buy a term insurance plan:

We are all fully aware of the ambiguity of life. Consider the scenario where you are involved in an accident and pass away, leaving your family who depends on you for financial support. It goes without saying that they won't have an easy life for a very long time. Therefore, it is wise to choose a term insurance plan that offers a bigger sum assured. Your family won't experience hardship even if something unlucky happens to you.

Get a suitable health insurance plan:

It's extremely typical to get sick, and if it gets worse, you could even need to go to the hospital. The greater medical expenditure that comes with being hospitalized these days is the hardest part. The cost of treating a sickness will always rise. Well, many folks lose all of their hard-earned money when receiving urgent disease care. However, you will be able to receive the proper care and save a significant amount of money if you have a health insurance plan that covers critical illness. The insurance provider settles the hospital's charge up to the coverage limit.

Only saving may not be enough:

It is important to invest your savings in a systematic manner so that you can achieve your retirement goal. When it comes to investment, you need to be aware of your risk appetite. Your risk tolerance is important to decide whether to invest in equity or balanced asset class, the exposure levels, etc. Different asset classes have varying risk and return associations. 

Say Goodbye to all the unpaid debts

Your sources of income decrease as you approach retirement. Some people simply cease earning money. The existing obligations may be too irritating for you in one such circumstance. Therefore, you should start paying off all of your debts as soon as your retirement years draw near.

The advantages of beginning financial planning early in life are numerous. Additionally, you can look at some of the top retirement plans that are accessible online. You won't have to worry about retirement if you start making tiny steps as soon as you start earning money and can just spend your days engaging in your hobbies.

Conclusion:

1) Understand and calculate your expenses. Know how much you need to save to create a retirement corpus.

2) Start saving early and take advantage of the power of compounding to reach your goal with less savings.

3) Saving is not enough; you have to invest your money in a systematic way for your retirement.

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