Retirement planning is a critical part of long-term financial planning. Many financial advisors worldwide have corroborated that the earlier you start, the better your chances of creating a large retirement corpus. However, retirement planning is easier said than done. It would help if you considered several factors, like future inflation, healthcare costs, etc. After all, you would want to ensure that you live a quality life when you hang your boots without making any compromises.
To ensure that you live the life you always envisioned for yourself, you must plan your retirement meticulously through different phases of life. The following tips will help you.
While you are in your 20s
When you are in your 20s, you may not think of retirement planning. However, it is the best time to start investing in a retirement plan. The sooner you start, the better chances you would have to build a larger corpus over a period till you retire.
Additionally, when you buy a retirement plan at a young age in your 20s, you can get insurance protection at an affordable premium. Starting early will give you a strong foundation for savings that you can build on later as your income increases. Lastly, when you start investing in a retirement plan in your 20s, you would get into the habit of regular savings.
While you are in your 30s
As you reach your 30s, you may be more settled in your career path, and you may have even started your own family. This means you would have the added responsibility of taking care of your spouse’s needs and securing their future too.
At this stage, you can either increase your savings in a retirement plan or purchase a separate annuity plan for your spouse. This will ensure that your spouse and you can be financially independent and take care of your needs in the future.
While you are in your 40s
If you missed investing in a retirement plan in your 20s and 30s, then all is not lost yet. You can start now; you would still have 15-20 years before you hang your boots. This would give you sufficient time to build a retirement corpus.
Considering you may have grown in your professional journey, you may have a higher income than the time you started. At this juncture, while your priority would be to take care of your family’s needs, especially children education, etc. you must take a bit conservative approach towards investing in retirement funds.
You can consider investing in different plans that guarantee capital security and offers assured returns. The best options you can consider are bank fixed deposits, public provident fund, senior citizen savings scheme, etc.
While you are in your 50s and beyond
When you are in your 50s, you will be a few years away from retirement. In investment parlance, they say, it is better late than never. You can start saving till your retirement age (usually 60 years). You may have paid off your dues by this time, and your children may have become independent. Thus, you can take an aggressive approach and divert a maximum per cent of your income towards saving in a retirement plan.
Final Word
There is no right time to start investing in a retirement plan. The sooner you start, the better. Thus, start thinking about retirement planning as soon as you draw your first salary and enjoy a peaceful and financially independent life post-retirement.