Life expectancy in India is likely to rise from the current 70 to 75 by 2050 and 82 by the end of this century, according to UN estimates in 2022. This means that most people would have to provide for at least 15-20 years after they retire, given that the retirement age is around 60 in most professions.
This shows that delaying retirement planning is not an option. Even so, fewer people take retirement planning seriously, especially when they are younger.
Goals like going on a holiday, children's education and others take precedence as retirement seems to be too far into the future.
"Often, individuals plan retirement later in life because they prioritise their family and children's financial security over their own retirement. They may start building the corpus in their 40s, but they may be caught up in daily responsibilities with lower surplus income. The inflection point is usually around 50 years, but by this time it is already a bit late," says Vikas Sharma, head of wealth management and private banking at IDFC FIRST Bank.
But did you know that the earlier you start planning, the bigger would be the corpus that you will be able to accumulate? Also, if you start early, the monthly investment required to build the desired corpus will be much smaller, because a longer term will give more time for the money to compound. Let's delve deeper to understand how this works.
Why You Should Start
Early First and foremost, an early start will help you enjoy the benefit of compounding. People usually start planning for retirement in their mid or late career when earnings go up, or goals like buying a house, children's education, etc., are met and they have money to spare. However, this robs them of the opportunities they could have had with an early start.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Gold ETFs And FoFs
While Indians love to invest in physical gold, even mutual funds offer the option, but in paper format.
PLANNING TO BUY CHILD INSURANCE? THINK TWICE
Child insurance plans combine insurance and investment but often offer low returns due to high costs, making a combination of a term insurance cover and mutual fund a better option for securing your child’s higher education needs
How Do You Define Happiness?
Money does buy happiness, but after a while, the appeal fades. We talk about our relationship with money, but, maybe, it’s time to revisit our relationship with happiness
Avoid Crypto As It Is Highly Volatile
I am 22 years old and have recently started working. I want to invest a small portion of money in cryptocurrency. How should I go about it? Does it require a huge capital investment?
Invest Right, Don't Speculate
The lure of high returns and quick gains from equity tips, cryptocurencies, and equity F&O can be enticing. But remember, return of capital is more important than return on capital
The Wedding & Budget: Is Minimalist Trend The Right Knot For You?
Indian weddings are known for their pomp and grandeur, but minimalist weddings are also in vogue now. Dia Mirza was one such celebrity who went for a minimalist wedding. If you also want to keep things minimal on your big day, here’s how to do it
Here's How To Buy An ETF?
Mutual funds are the preferred choice for retail investors. However, they come at a cost and fund management risk, apart from other risks. A smarter alternative is to invest through ETFs.
How Passive Funds Help Diversify
Passive funds provide a simple way to invest in broad markets as well as in specific themes and sectors, making them ideal for an investor's satellite portfolio
The Rise Of Passive Funds
The popularity of passive funds among retail investors has risen post Covid, and fund houses are out with many variations of ETFs and index funds. Does this category present a new opportunity for investors?
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms