Personal Finance Blog India –

Retirement Planning – Which Factors Should We Focus While Planning For Retirement

Time passes out as much quickly.Its about more than couple of decades now when I finished class XII exam but sometimes I have a feel that it has finished just yesterday..what I want to say is that time passes as much quickly & as well I will not understand when next couple of decades will also pass & I will enter my retirement age.

Retirement is an important event of life & for peaceful ,self-dependant retirement we must have take few important things in account.

  1. Start today: Today is the best day & any age is the best age to start good things.So start thinking about retirement planning today.
  2. Get rid of bad habits[like excessive smoking]: I am personally focusing on this factor.It will be irrelevant to write about my bad habits but surely in long term I am purchasing pain through them.
  3. Make use of long term & illiquid instruments:Make maximum use of long term instruments like PPF,EPF.Good thing is that such instruments are tax efficient as well so try to have maximum extraction from these instruments.
  4. Don’t touch retirement money:Try to raise money differently for purposes like childs marriage/education/higher education.But try to avoid liquidating money raised for retirement.
  5. Have some approximation about money required for retirement:Inflation is a major money killer & considering time value of money we will need much more higher amount in future to complete monthly needs.

Following table will give few approximate numbers:

Monthly Amount Required Today Rs. Inflation Rate considered Monthly Amount required after 20 Yrs for same needs
10,000/- 6% 32,000/-
20,000/- 6% 64,000/-
10,000/- 8% 46,000/-
20,000/- 8% 92,000/-

6. Consider Risk of long leaving:We always face two types of risks.short leaving & long leaving.Risk of short leaving can be covered by having necessary insurance.Long leaving is also a risk & one should plan for retirement considering living for long term.

One important point I would like to mention that don’t let grow fear of insecurity while having retirement planning.Big,scary numbers can create feeling of insecurity within the mind which can also lead to physical problems like blood pressure,tension etc.So retirement planning should be done with as possible relaxed way.

You may have also think for your retirement & may like to share in the comment section below….

Category: Fixed Income


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