To make our retired life self dependent and beautiful, we all have to start saving as early as we can. Retirement does not mean passing time at Haridwar or lazing around on a beach with nothing on your mind but to be able to sustain living with returns but without really working for it (as we have already planned, worked and saved).

We all dream of a beautiful life after retirement but the question is - Are we properly planning for it? The answer is - ‘NO’.

To make our retired life self dependent and beautiful, we all have to start saving as early as we can. Retirement does not mean passing time at Haridwar or lazing around on a beach with nothing on your mind but to be able to sustain living with returns but without really working for it (as we have already planned, worked and saved). We have to even think about the uncertainty and unforeseen medical expenses which may arise in future.

Need For Pension Plan:

• People are living longer, thanks to health-care innovations and working life for them is decreased.
• Tight-knit extended families are no longer the social norm, so older folks can't count on being supported by their descendants.
• No adequate provision for pension savings from employers.

After understanding the retirement needs now we should look how much, when and where??

Retirement planning is a reverse calculation of what life style you expect after you retire and what is amount that you have to invest for reaching that value.

Suppose you are 25 rights know and your current annual expenses are Rs. 3 lacs. You are planning to retire at 55, so, value for this 3lac will be 17,23,000(approx) after 30 years at an average inflation rate of 6%. And to earn the same, as your regular source of income, you need to have rs. 21538000 (approx) in your bank considering pension rate to be 8 % p.a.

So, to have this amount in your a/c after 30 yrs., you need to invest at least rs.9900 monthly considering returns on investments to be 10% annually.

To calculate your retirement corups please Click this link - Retirement Calculator.

How much?

This was a simple illustration to make you understand that you need to keep current annual expenses, retirement age, rate of returns that you are expecting from your investments, while calculating the investment amount.

When?

As span decreases, the value you need to contribute, increases. Therefore, early you start your investments; sooner you reach your desired returns. Because its’ all game of compounding returns.

Where?

Retirement planning is always a long term investments, where you need to maintain diversification in your investments. You should choose an investment option where you get moderate returns up to at least average 10 % because your growth should always be higher than average inflation rate.

If you are choosing mutual fund or ULIPs, you should look flexibility and option to maintain your investments according to you risk taking capacity from time to time.