If you are in your 30s or 40s, chances are that you are a long way off from thinking
about retirement. The sad truth is that nobody tells us that it is never too soon
to think about planning for the future. While you are still working and getting
a regular income, you believe that your salary can help pay for any eventuality.
But the reality of retirement is quite different. It can be a wonderful time in
one's life, or a dreadful phase with financial uncertainty.
The benefits of retirement
Retirement is a golden phase in one's life. Most of one's familial obligations are
complete, one has some savings stashed away and there is finally time to do all
the things that one did not have time for previously.
Retirement planning in India
If one is to have a peaceful retirement like one imagines, then one needs sound
financial backing in the form of savings and investments. The concept of early retirement
planning is not new in India, but it is often unstructured. For instance, very few
people actually calculate their future needs or make provisions in the form of retirement-centric
How to plan for your retirement one must plan for a retirement income right from
an early age. In fact, the 30s are the time to plan your retirement and take proactive
steps towards the same. This entails:
Saving regularly. Setting aside a portion of one's earnings every month offers rich
rewards in the future. Starting today, if you were to save Rs 10,000 per month at
age 32 right up to age 60, you would accrue a savings funds of Rs 33,60,000 by the
time you retire. To this, you can add quarterly interest from the bank, additional
earnings from job, cash gifts, annual bonus, and money collected from rent, returns
on investments, etc. This fund of money is then available for your retirement years.
Get an extra income. Working freelance or part time over the weekends can open up
a second stream of income for you. This other income can help you pay your monthly
bills, thus freeing up your job income for savings or investments.
Earning during your retirement years
Your retirement results in your income stopping right away. However, you can earn
a retirement income if you have invested in an annuity plan or pension plan before
you retired. These plans mature at the retirement age that you set (it could be
age 45 or more) and pay a regular income to help you sustain your monthly expenses.
You can also invest in mutual funds, PPF or Fixed Deposits to grow your wealth.
These instruments can help you have a comfortable retirement.