Rethinking Retirement Planning


Even if you are late in the game and you’re not on track for retirement, there are still a number of productive actions one can take to bridge that gap. 

 Retirement planning as we know it is an evolving concept. For one person it may be the chilling of at a retirement home in Europe. For another, a sojourn in Africa with the Peace Corps. Now it seems that the way we achieve our retirement dreams, whatever they may be, soon could be changing as well. 

But how to achieve your retirement goal is a bit of mystery? All of us know that they should save for retirement, but how much one should be squirreling? 

A survey by Max Life Insurance India at urban level suggests that around 80% of people are not ready for it and India’s Retirement Index stands at 44 which maps the retirement preparedness of consumers in India measured on basis of 3 components Health, Financial and emotional Index. 

Retirement is one of the most important phases of life. It brings a sense of relief to those who have worked tirelessly throughout their youth and now want to have a comforting life. To relish a peaceful retirement, one should start financial planning at an early stage of life to manage expenses. The early one starts the more benefits one will reap post-retirement. 60 Years of age is considered a perfect age for retirement, once it is attained one should have a financial backup to manage their future expenses The financial Corpus should be built in a way such that the financial corpus should stay longer than one’s own life and it should be not the other way around.

retirement investments

Things to look out when planning for retirement.  

  • Inflation Rate 
  • Healthcare Expenses 
  • Monthly expenses 

The Retirement plan currently are the 401 k in the U.S.A which is tax-free, and employee benefited. In India there are retirement plans like EPF(Employee-Provident-Fund) PPF(Public-Provident-Fund) and VPF(Voluntary-Provident-Fund). One could also invest in the following investment products. 

retirement planning

In the real world, a financially successful retirement is not about some magic number nearly so much as it’s about the relationship of your income to your expenses. Ideally the 4 % rule is applicable here which is to have expenses of 4 % from your retirement corpus.  

Here are a few things one should try to attain when they retire: 

  1. Having a house of your own 

One should work towards owning a house because for a person who is retired there is no sense of security other than owning their own dream house. It also provides with a lot of benefits including rental Incomes and long term capital gains . 

  1. Insuring yourself and family 

The cost of private healthcare is skyrocketing by 13-14% each year. For a middle class, bearing these costs during a medical emergency is next to impossible, Therefore, one should invest in health insurance. It provides financial protection against health emergencies as it covers pre and post hospitalization, cost of treatment, ambulance charges. 

  1. Starting Early 

The wealth accumulated for retirement is determined by a simple equation. Amount=P(I+r) n Longer the duration, higher will be the accumulated wealth. So, a wise option is to start investing early in order to benefit from the power of compounding. If you start late, you will have to invest a higher amount to create the desired corpus till your retirement.