Retirement Planning Some Interesting Facts
- When you are reading this then you are probably among the majority of new age Indians who have absolutely no post retirement support called Pension.
- India’s 60+ populations will become 30 Crores by next 35 years from 10 Crores today. Imagine the scenario when you will be one of those 30 Crores people with no source of Income.
- The Government is facing a huge fiscal challenge to provide pension/support to private sector retirees.
- The existing pension schemes are good for organized workforce that forms about 10% of the total working population.
- Approx 90% of population working in private sectors is refrained from social security. Only 9 - 10% of them are covered by pensions.
Why having a Pension is vital when you Retire?
- Your average work life is of 30-35 years. But what about 30 years of life post retirement when you won’t have any income?
- Due to the increase of nuclear family system as a result of urbanization which is leaving more families insecure, vulnerable and devoid of social security which our grandparents did not experience.
- Also with the advancement of Medical facilities there is a sudden increase in life expectancy for the growing retired population of India. The happiness of living longer doesn’t come alone. Increased longevity also means more money is required to meet requirements.
- Making provision for regular INCOME post Retirement is the most essential Investment one should start as early as possible and investment in Life Insurance can give you the edge over other short term investment.
Got a job, Start planning for Retirement
- All of us get bogged down with immediate expenses like housing EMI’s, Rents, Car EMI’s or Child’s education. These expenses are inevitable same is Retirement too.
- Start as early as possible and invest at-least 10 - 20% of you present income for Retirement Fund. Earlier you start better the compounding effect.
- Let me share an example
|Retirement at AGE 60 Years|
|Saving start Age||25||40|
|No. of years of Saving||35||20|
|Value of 5K Invested /Month @ 8% Return||1.03 Crores||27.45 Lacs|
Retirement Corpus Compulsion
- This happens to us all the time, we invest for a defined goal but either discontinue or break the investment because of some immediate requirement.
- I am sure you would have broken a FD or withdrawn from a mutual fund for some immediate financial requirement and later thought was it really necessary
- Invest fixed amount in a scheme in which exit is difficult so that you stay invested for a long time for taking advantage of compounding effects.