Although retirement is one of the most distant financial goals, it is in our own interest not to ignore it. Rather, an early start for this distant goal is easier to handle than a goal that would come knocking early. Here are some reasons as to why one needs to plan for one’s golden years especially during the earning phase of life.
Increasing life expectancy
With increasing life expectancy, the non-earning period in an individual’s life is expanding. Someone retiring at age 60 after working for 30 years could live on for another 30 years or more. What it means is – 30 years’ earning period feeds the 30 years of non-earning period! This is essentially the 30-30 rule in retirement planning.
Early retirement
More and more people are planning to retire early. But this would require a larger corpus to retire with. Earlier, people typically used to retire at 60 years of age but nowadays many look forward to retire by age 40 if not 50. With changing corporate work culture, many could be forced into retirement by the time they turn 45 or 50.
Cost of living
Year-after-year, the cost of living is increasing. Sample this: Rs 50,000 monthly household expenses will be close to Rs 1.70 lakh (3.5 times) after 25 years, assuming an annual inflation of 5 percent. Inflation will be active even in the post-retirement years and be more pronounced as there won’t be any income during these years.
If one seems comfortable with a crore of corpus, let’s look at its worth or the purchasing power after 15 years at 5 percent inflation. Rs 1 crore will fetch you value of about Rs 48 lakh!
Cost of delay
Bu hikaye Investors India dergisinin April 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Investors India dergisinin April 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
ASK THE EXPERT
Ques. One of my friends told me that your company provides detailed Retirement plans. I want to know what is the procedure to get my Retirement plan. I will be retiring in March 2025. R.P Gupta, Noida
How to Naturally Reverse Fatty Liver Disease
The liver, located on the upper-right side of the abdomen, is the body’s largest internal organ and plays a critical role in detoxifying the blood and processing nutrients.
Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile
Do you think the market is overpriced? Is yes, should investors refrain from investing in index schemes at the current valuation?
India will continue to enjoy benefits of a close US relationship and trade will continue to grow
Q1. The US elections are said to be one of the closest till date, what impact will the election of a Republican / Democratic party have on the US economy and how is that going to affect India in the short as well as the long term?
Understanding Momentum Funds
Momentum funds are a type of investment fund that focuses on companies experiencing positive momentum in factors such as earnings, revenue, and stock price movement.
Risks and opportunities associated with Small Caps
Small-caps are a stock-picker’s paradise.
How to navigate your portfolio through bull market a
Indian equities have been in a bull run for the past four years.
Choosing mutual fund schemes depending on your age to achieve life goals
The choice of mutual fund (MF) scheme might be influenced by one’s risk profile or age.
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.
Be Kind To Your Kidneys
The kidney is a vital organ in our body which is four inches long and two and a half inches in width.
