Plan your retirement
“How much money do I need to retire in India?” - This is an important question to ask yourself while planning for retirement.
Retirement planning does not follow the ‘one size fits all’ approach. The amount that you would need for your retirement would depend on the way you want to live your post-retirement life. A comprehensive retirement plan can help you calculate the amount you would need for your retirement and invest accordingly.
Steps to plan your retirement
Below are some key questions that can help you build a retirement plan:
1. What are your retirement goals?
You retire from work, not life. You may have a new set of dreams and goals. For your post-retirement life. You may want to travel, pursue a hobby, start a new venture, and more. The amount that you would require during your retirement would largely depend on the goals that you want to achieve post retirement. It is important to factor in inflation while calculating this amount.
2. What will your financial responsibilities be?
Even after retirement, you may have financial responsibilities, such as your child’s higher education or marriage, the financial security of your spouse, staying financially prepared for any medical emergency, and more. It is important to factor in these expenses while calculating the amount you would need for your retirement. Do not forget to consider inflation in this calculation as well.
3. When do you want to retire?
Deciding the age when you want to retire will help you understand the number of earning years you have left before you retire. This will help you calculate the amount that you would need to save regularly. For example, if you are 45 years old and plan to retire at the age of 60, you have 15 earning years left. This means you have 15 years to save regularly for your retirement.
You can also consider using a retirement planning calculator that can help you calculate the money you would need for your retirement.
Once you have an understanding of your financial requirements, you can consider investing in a retirement plan. These plans can ensure you stay financially independent during your retirement. There are two types of retirement plans that you can consider investing in basis your need. Let us understand the plans below:
Retirement savings plans
You can consider investing in a retirement savings plan if you want to start saving for your retirement in your early years. These plans help you save regularly during your earning years and provide you with a large amount for your retirement. You can then invest this amount in a retirement annuity plan to receive a fixed regular income during your retirement years.
Retirement annuity plans
These plans provide you with a fixed regular income during your retirement. You can choose to receive this income immediately or at a later age. This regular income can ensure you stay financially independent during your retirement. You can consider investing in a retirement annuity plan if you are in your 50s and nearing retirement.