What is Retirement Planning?
You have worked hard to support your family and give them a comfortable life. What about your financial security after you stop working? Isn’t that important too?
Retirement is one of the largest financial goals in life. Retirement planning is the process of determining your retirement goals, estimating the corpus you would require to maintain the desired lifestyle, and implementing this strategy to financially secure yourself in the future.
Early and effective planning could help you maintain the same standard of living post-retirement and lead a stress-free life.
FAQs
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
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.
