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Retirement Planning 101: A Comprehensive Guide to Secure Your Financial Future”

When you start earning and begin your financial planning journey the logical steps are to create an Emergency fund (Click Here) and to start investing as per your goals and risk appetite (Click Here). The next step of the journey is to plan for retirement.

What is Retirement Planning and why is it important.

When we start earning, we focus on making the most of our careers and moving up the ladder. Most of the times we delay small pleasures of life like travelling, pursuing hobbies and interests and enjoying leisure activities and we postpone them till our retirement. Retirement is a beautiful phase of life where you can do things for which you did not find time during your working years. It can bring a range of emotions like excitement, and anxiety. As the saying goes- Retirement is not the end of the road. It is the beginning of a open highway(sic).

But retirement can also be scary as it means absence of an active income stream. This may bring in financial insecurity, if Retirement planning has not been done at the right time. It is imperative to start planning for retirement early to ensure a comfortable and secure retired life. Unplanned retirement can be daunting as the inflation rises and medical costs increasing with increasing age. If someone retires at an age of 60, and lives up to say 85 years, there is still a period of 25 years which has to be spent while maintaining a decent lifestyle and as per your goals. Retirement planning is therefore required so that this period of 20-25 years can be spent with peace of mind.

What is your retirement number & How to calculate your retirement fund needs?

Retirement number is the amount of retirement fund required at the beginning of retirement to spend rest of your life comfortably. How much will your retirement fund be will depend on what your current lifestyle is and what you want to do during your retirement. This means whether you want to travel frequently, buy a house etc, all this while taking care of your day to day expenses while the monster of inflation silently eats into your savings. Age also brings medical expenses which may be unplanned and may burn a huge hole in the pocket.

There are many retirement planning calculators available online for free which will help you to have a fair idea of how much retirement fund you need. But before starting your retirement planning, ensure that you have already created an Emergency fund which is equally important to have in place.

How to Plan for Retirement

Once you calculate your retirement needs, you may realize that the fund amount is a huge number which may even scare you in the beginning. Worry not because the only solution is to start saving as early as it is possible for your retirement. There are simple steps to plan your retirement which can help you.

  1. Provident Fund: If you are a salaried employee, you must already be paying a portion of your salary as contribution to Employee Provident fund. This is around 10%-12% of your basic salary.  Ensure to not break into your PF when you switch jobs. EPF is a good way to keep your money secure and let it grow into a sizeable sum that you can avail during your retirement.
  2. National Pension Scheme ( NPS) NPS is a retirement benefit scheme introduced by Government of India, where just like Provident fund, a fixed percentage of your salary is contributed which adds u to a  lump sum amount which can help you at retirement. You should definitely opt for NPS if your company has a facility for it.
  3. Systematic Investment Plan (SIP) in Mutual funds. SIP is an investment scheme offered by all mutual funds where investors have an option to invest small amounts periodically instead of huge lump sum amounts. SIPs help in growing the money using the Power of compounding. The frequency of SIP is usually weekly, monthly or quarterly.

    Retirement Plans in India

    There are many retirement specific plans offered by mutual funds, and by Insurance companies in India. Other than that we have NPS, PF etc as mentioned above. One can choose a mix of these plans as per their future goal and risk appetite. The only thing required is the consistency to actually harness the benefit of growing economy and to use it to secure your future. Other than the traditional Retirement options, there are a plethora of investment options where you can invest like Mutual Funds, Stock or shares, Bonds, Sovereign Gold Bonds and real estate. Each of these comes with its inherent risk and return. It is very important to follow diversification in investment to mitigate risks.

    Review and adjust regularly.

    It is also crucial to keep reviewing your retirement plan and retirement fund regularly. This is required because as life moves on our priorities change, our situations change and our lifestyle changes. It is important to be flexible as the plan may need changes periodically.

    In conclusion, retirement planning cannot be ignored from very start of your career. A robust retirement plan requires goal setting, financial analysis and thoughtful consideration of all factors to ensure a secure financial future. Regularly reviewing and adjusting our retirement plan is vital for staying on track. Life circumstances change and it is crucial to periodically revisit our goals, financial situation, and investments.

    By following the steps outlined in this blog, individuals can take charge of their financial future and work towards a secure and fulfilling retirement. Start planning today, as early as possible, and embrace the peace of mind that comes with knowing you are prepared for a comfortable retirement. If you need any help in calculating your retirement number and how to plan for it, you can click on the link ( for a free one on one session where we can help you better. We shall be more than happy to help you.