Points to consider when you start saving for retirement

Here are some points to consider when saving for retirement:

a. Set a goal

Setting a goal gives you a roadmap to follow. It helps you in calculating the amount you would require to achieve it. During retirement, you may want to pursue a hobby, start a new venture, travel, and do more. Identifying your goals helps you plan better and save accordingly. You can also use readily available tools like a retirement calculator that can help you calculate the amount you need to save to achieve these goals.

b. Keep a close eye on inflation

Inflation leads to an increase in the prices of goods and services. This means, to consume the same amount of goods and services in the future, you will need to pay more. For example, if the rate of inflation in the current year is 6%, it means that on an average, an item that was priced ₹ 100 last year is now priced ₹ 106. Inflation not only affects the prices of non-essential items like electronics, cars, furniture and jewellery, essential items like food, electricity and gas also become more expensive.

When saving for retirement, it is important to factor in inflation, so that you can plan and save accordingly.

c. Cut down on unwanted expenses

Unnecessary expenses can hamper your savings. Planning a budget and following it can help you cut down on these expenses and save more for your retirement. It is important to track your expenses and minimise them as much as you can. For example, you can consider cancelling subscriptions to magazines or OTT platforms that you do not use. You can also limit dining out and consider cooking at home. Keep in mind that the money you save now can help you build a retirement pool for the future to live your dreams.

d. Adopt a healthy lifestyle

Health can be one of your primary concerns as you grow older. Given rising medical costs, it is essential to start planning for these costs in advance. However, you can avoid a majority of these costs by living a healthier lifestyle. Healthy practices, such as exercising regularly and maintaining a healthy diet can avoid a lot of diseases and hence, help you save on medical expenses. These savings can be used to meet your post-retirement needs.

You may consider buying a retirement annuity plan that can provide you with a guaranteed¹ regular income for life, post retirement. This income can help you achieve your goals and cater to your day-to-day expenses as well. ICICI Pru Guaranteed Pension Plan is one such new-age retirement annuity plan that provides you 11 different options to choose from as per your needs. The interest rates are locked-in at the time of the purchase of the plan. The returns, therefore, are unaffected by market fluctuations and are guaranteed¹. It also provides an option to increase your investment in the plan using the top-up feature^# to cater to your increasing needs. The premium paid towards the plan is allowed as tax deduction^* of up to ₹ 1.5 lakh per annum under Section 80C of the Income Tax Act, 1961.

¹T&C apply

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