Retirement is ignored phase in everyone’s life. A salaried or businessman has to retire at certain age, be it early retirement or extended retirement. Anyone who is working will retire definitely or otherwise re- tire. Government has also fixed retirement age of their employees at 58. It’s the time when efficiency of person reduces due to health conditions or change in technology. Retirement is a phase where a man relaxed rest of his life if properly planned otherwise work throughout his life. But it’s not guarantee that his health or other circumstances will allow him/her to work whole life. So it’s good to plan our retirement so that we can enjoy it without burdening anyone in family or asking help from relatives.
There are some major reasons which influenced our retirement planning….
Life expectancy– Life expectancy is increasing due to better medical facilities available.
No Joint families– Earlier there was joint families system, so if anyone retires from his work he has other members of family to take care of his basic needs.
High Medical Cost– Nowadays medical cost is increasing day by day. After retirement no company pays for medical bills, so its own responsibility to plan for it.
Life style– Earlier people retires and plan for Char-Dham Yatra or join religious group for rest of life. It has changed to foreign tours, chauffer driven cars, maintenance of same lifestyle before retirement.
It means we have to plan our retirement otherwise we have to work or ask others to help us during retirement phase. It’s our first generation of private sector employees which is going to retire in coming years as earlier all salaried had some sort of social security.
But problem with our young generation is that no one wants to think about retirement during initial years of job. They feel it’s just start of their earning phase so why they save and plan for retirement as they have other priorities like High end Smart phones, Bike, Cars, eating out every weekend etc. But if they try to understand the benefit of early planning, it can change their life drastically.
Here is one example of early retirement planning….
Mr. X joined his job after doing MBA at age of 27 years. After 3 years he understood the need of retirement planning and asked one Financial Planner to make a retirement plan for him. He has been told that you have to require 3.6 cr. at age 60 to satisfy your basic expenses. To achieve this corpus start an investment of Re. 10000 p.m for next 30 years in a product which can give approx. 12% return on your portfolio.
Mr Y. friend of Mr. X also joined job at age 27 but didn’t listen to his friend and started planning at age of 35 for same retirement plan but he has been told to save Re. 19000 p.m for next 25 years in same product to achieve his retirement goal with same return.
So, it shows that only 5 year delay can cost you double your contribution for this single goal and same in case of other financial goals. Early planning will put less burden on you and spare your money for your other goals like child education, child marriage etc.
Plan your retirement on a day of your joining job or keep yourself ready to increase your contribution for retirement.
Happy retirement……
Invest mart
Really a very useful information.
good for us