Category : Retirement Planning
Retirement planning is not just a one night process.This is a systematic plan or process which is to be executed meticulously throughout one’s entire working life.Many a times in the past it has been seen that a person earns a hefty amount but without proper planning and ignorance towards unforeseen future events has to adjust or compromise with one’s financial liabilities to a great extent during his sunset period.Considering today’s fast paced lifestyle it has become mandatory for everyone to lay down a proper plan towards retirement.A well laid out plan not only helps in maintaining the same standard of living but also it helps one out in enjoying the sunset life with the loved and dear ones more strongly.Even a sailor of a boat supposed to know the goal or destination where he will have to reach and even the retirement planning is also very alike.Since, planning for retirement generally takes 25 to 30 years ,one should not take this very likely.Everyone should maintain the sanctity and must be disciplined enough to accomplish the set out goals without keeping any stones unturned.
Now the question arises before us is how to plan for retirement.Where to start it from?I must point out here that it is very simple since this is not a rocket science.We must bear in mind that only the holistic approach towards this planning is going to help us in accomplishing our goals and not the halfhearted one.The main principle of planning for retirement is based on three questions viz; how much to save,how to save, and where to save.
Firstly, we should be very clear about our present standards of living.Also, it does not mean that a person’s standards remain same during his entire life span.I am just trying to focus mainly on the present standards of living from which we can go up only and no chance of being dragged.That means we need to chalk out how much wealth we need to accumulate in various ways so that we can maintain at least the same livelihood after our retirement.Not to be very much worried for this section since now a days there are various methods available in the market through which we can determine the inflation adjusted wealth or retirement corpus.We must consider the impact of inflation here.Inflation basically reduces the purchasing power of money.Thus, the very first part is need estimation.
Secondly,we have to find our our income status or level.How much amount we need to keep aside monthly for investments or if there is any shortfall, from where we can manage it or what are the avenues where we need to curtail our present expenses.Remember, I already mentioned above that only the holistic approach towards this planning can help us in reaching our goals.Sacrifice now to reap the benefits in future.Here, I would like to mention the famous quote of none other than Sir Warren Buffet that “Income minus Savings= Expenditure”. Spend only that amount which is left after savings.
Thirdly, the most important part is we must determine the investment avenues or areas where we need to put in our savings so that we can accumulate our retirement corpus such as Mutual Funds,Stocks and Bonds,Fixed Deposits,Recurring Deposits,Life Insurances and many more.Why I consider this section most important is because only this decision or selection would determine the actual fate of our planning. I mean the success of planning for retirement solely depends on the investment areas which may sail us towards our mission easily.
So, if any one is going to retire very soon must ask oneself ” Have I done justice to my family,to my earnings of my entire life?” Is my corpus sufficient to bring me a handful earnings for the next 20 years smoothly?Or, I may have to make some adjustments or compromise with some of my past dreams which were to be executed post retirements.