Have You Started Saving For Retirement

There are many who believe retirement is a distant reality, planning for which can be pushed to much later. What this usually means is that in your 20s you feel you are too young to plan for their retirement, while people in their 40s feel that they are too late! However, once you understand that eventually, you will have to think about retirement, here’s what you can do:

Starting at 25: Start an SIP in equity mutual funds. The amount you invest at this stage doesn’t matter because even Rs 1000 invested every month will grow substantially. This amount will compound for the next 35 years (60-25) and beat inflation - which is the whole point of planning for retirement early on.

Starting at 35: At 35, your savings towards retirement get 25 years to grow. Once you have taken care of your emergency fund, allocate at least 50% of your savings towards retirement. The goal is to beat inflation and create a corpus that will generate an income for you in retirement. Equity mutual funds are again an excellent option here apart from your EPF savings.

Starting at 45: You have about 15 years left to retire. You need higher savings and a higher return on those savings. Do not shy away from Equity Mutual Funds, and plan to invest 50% of your income. If that seems high, remember that you don’t really have an option. Even with these savings, you may need to work beyond 60 to maintain a good lifestyle...