"Ladakpan khel mein khoya, Jawaani
neend bhar soya, Budhaapa dekhkar roya”, an evergreen song, from famous Raj Kapoor’s movie - Teesri
Kasam, very well depicts the attitude of people towards Retirement Planning. We
come across so many aged people who had never spent one extra paisa in their
youth for their personal entertainment yet we see them struggling after
retirement to even eat a two course meal. WHY
IS IT SO?
Why
do people never think of Retirement?
·
Failure
to think of old age –Mein toh kabhi
Buddha nahin hounga!!!
·
Can
never visualize change in economic conditions.- Mere paas bahut paisa hai!!!
·
Dependency
on Children’s monetary Support.- Mere
Bacche hai Na!!!
·
I
can never retire from work. – Kaam hi
meri Pooja hai!!!
What
is Retirement Planning?
Retirement Planning is planning for your financial needs of retired
days during your earning/active working years.
Retirement
Planning is necessary because…..
- Improved health facilities have increased the life span.
- To lead a tension free, independent retired life.
- To have regular income post retirement.
When do we plan for retirement?
·
The
most appropriate time to begin planning for retirement is with your first
earnings/ salary received. The early you start the easier it is to reach your
goal.
Imagine
a situation where a person needs Rs.1 crore at age of 55 to spend his retired
life in his native place and pursue farming. Let us look at the various stages
when if begins to save for this goal, then what is the amount he needs
to save per month:
Age when
savings begin
|
Amount to be saved per month till age 55
Rs.
|
30
|
10,445/-
|
40
|
28,707/-
|
50
|
1,35,196/-
|
Thus, the amount required to be
saved per month by 50 year old person to collect Rs.1 crore at his age 55 is
almost 13 times more than a person aged 30. Thus, it is better to start the
savings at an early age.
How
do we save for Retirement 
Earlier every individual thought that he could face his retirement comfortably with the
monthly pension he would receive from government and after his death that amount would help his family. Although, pension still remains the most
popular route, there are many investment alternatives to enjoy retirement. Some
of them include:
a) Provident
Fund: EPF/PPF
b) NPS
b) Real
Estate
c) Gold
d) Equity
e) Insurance:
Pension, Endowment Plans
Is
there any ideal asset allocation for Retirement Planning?
No, there is no ideal
asset allocation for planning corpus on retirement. It varies with risk taking
capacity of an individual and also, with his monthly savings. A person with
savings of Rs. 5lakhs can divulge in risky assets or block his chunk of money
in real estate. However, a person of limited resources can’t risk all his
retirement savings in risky assets. He needs to balance his allocation.
Thanks and Regards
Team
Email: saarthifp@gmail.com
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