You would have to choose investments to reach your retirement goal based on how much money you would require after retirement. The major factor is setting up a retirement goal is at what age you want to retire. Earlier you want to retire; more is the importance you need to give to your retirement planning. Take up investments to match your retirement goals based on the risk you are willing to take. If you are a conservative investor invest in risk free securities. If you are an aggressive investor, invest in securities which give higher return at higher risk.
Why Retirement Planning?
Live an Independent Life
Your children would provide you money for a retired life. But it is right for you to depend on them?
You can retire early with excellent retirement planning. You will have plenty of time to catch on your hobbies and other interests.
Money for Retirement
You get no income after retirement. You have to plan for your retired years now, if you want to enjoy the same lifestyle you currently enjoy.
Higher you spend You get tax benefits if you invest your money in a pension plan or an annuity scheme. This helps to save on tax.
Key factors to consider for Retirement Planning
How to do your Retirement Planning?
- Retirement planning is done based on age.
- Retirement planning is done keeping inflation in mind.
- Retirement planning is done well should help you lead the same lifestyle after retirement, that you lead now.
Steps in Retirement Planning
- Your current age and when you plan to retire is very important in retirement planning.
- Know your current expenses. Higher they are, more is the money you require at retirement.
- Keep inflation (General rise in prices of goods and services with time), in mind when you do retirement planning.
- Calculate how much you would require after retirement to maintain the same kind of lifestyle you enjoy now.
- You have to estimate how long you would live after your retirement. If you were to live up to 80 years (20 years beyond your retirement age of 60 years) you would have to plan for these years.