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What are the Stages of Retirement Planning?

With the evolving dynamics of life, retirement goals may also witness a radical change. Our earlier generations focused on fulfilling responsibilities towards family and living a peaceful life post-retirement. However, today we aspire to reduce our working lifespan and enjoy the fruits of our hard work with early retirement, living carefree for the rest of our lives.

Let's walk through the different stages of life to understand how to prepare for retirement:

Youthful Adulthood - Planning Period

This stage could be typically characterized by several priorities such as financing professional aspirations, buying a house, and building an emergency corpus for contingencies.

During this phase, investors are willing to take greater risks and allocate a large pie of their portfolio to growth-oriented assets such as equities to earn relatively higher returns over the long term. While individuals embark on their investment journey to achieve goals, not many realize that they should also chalk out a retirement plan to secure the golden years of their lives.

Middle Age Group - Transition Period

You may have to finance your child's further education, support ageing parents or repay loans availed earlier. Moreover, with rampant lifestyle diseases, you would seek medical insurance plans to curtail your financial obligations.

As retirement is nearing, middle-aged investors may choose to shift from an aggressive investment strategy to a dynamic asset allocation strategy to balance the risk of the portfolio. Hybrid mutual funds expose the portfolio to a blend of equity and debt, offering the best of both worlds - equity could generate capital appreciation over the long term while the debt component could cushion the impact of the fall during market downturns.

Senior Age Group - Reap the Benefits of your investment

Embrace your retirement phase with open arms; it's time to bid farewell to your fast-paced work life. In this phase, you would accept cash flows from various sources such as systematic withdrawal plans, annuities, dividends, and capital gains.

Investors would be more conservative by allocating most of their portfolios to relatively stable investment options such as debt mutual funds and other fixed-term instruments.

Don't skip out on reviewing your portfolio regularly and monitoring the plan at every stage of your life. In case of any changes in goals, the allocation would warrant rebalancing in line with your requirements.


You may consider the below steps to plan for your retirement and achieve your financial goals:
  • Set a target retirement age
  • Identify your retirement goals
  • Calculate the amount you will need to meet these goals. Factor inflation into the calculation
  • Invest in the right retirement plan that can help you stay financially prepared to meet your post-retirement goals.

Retirement for everyone is different. This is why, the money you need for your retirement depends on various factors like:
  • Your retirement age
  • Your health and lifestyle
  • Any loans or liabilities
  • The retirement goals you may have
  • Any commitments you may have to fulfil
We can help you find out the amount you may require to invest to maintain your life during retirement with our retirement calculator. Just answer a few basic questions on your income, age, the number of years till you want to retire, your current retirement savings, if any, etc.

Not thinking ahead can hamper your retirement. Some of the decisions like quitting your job before checking on your retirement-plan vesting status, not saving or planning, not maxing out employer matching funds, investment mistakes and poor tax planning can impact your retirement.

You should start planning for your retirement as early as possible. Investing early offers more time for your money to grow and chances to earn higher returns. This helps you stay financially prepared for your post-retirement needs. The amount you need to save for retirement depends on your post-retirement goals. You may want to travel, buy a house, start a new venture and more. You would also want to continue your current lifestyle after retirement and meet medical expenses. Basis these, you can calculate the amount you will need during your retirement. Do not forget to factor inflation into this calculation. Once you have calculated the amount you will need for your retirement, you will be able to calculate the amount you need to save now to stay financially independent during retirement.