Retirement corpus is the amount you require post-retirement to meet your expenses and continue with the same lifestyle and maybe pursue your other personal goals. Retirement plans are specific investment plans that allow you to save money for retirement in a systematic and disciplined manner. You contribute a set amount of money to the plan on a regular basis, so that by the time you retire, the plan will have amassed a sizable fund. Retirement plans frequently include both asset accumulation and insurance coverage.
GEPL Capital will explain retirement planning with the following assumption
Retirement may feel like a long way off when you're young. Financial planning, on the other hand, is required if you wish to retire in luxury and dignity. Whatever your dream retirement looks like, whether it's a relaxing time at home with family and friends or an adventure-filled trip around the world, you'll need money.
SO, let's take a deep dive on how to plan retirement to make it worth 30cr.
The first step in retirement planning is to visualize it. Consider how you want to spend your golden years and then calculate how much money you'll need to make it happen. Don't forget to factor inflation into your calculations.
The timeframe you are left with to plan for retirement.
Here, you are 25 years old and you wish to retire at the age of 60 years, then years to retirement = 60-25=35years.
Time Post Retirement
Years of post-retirement = 75-60 = 15 years
Most individuals who are in their 20s and have recently started earning might think that retirement is a distant reality. For them, planning for retirement at this early age may seem like being overly cautious. Beginning to invest early in life will enable you to accumulate the necessary corpus required without much stress. And it gives you peace of mind.
For retirement planning, first, ascertain your annual expenses at present. It is important that you make an accurate estimate of how much amount you will require, to maintain your present lifestyle after you retire. Then factor in inflation to calculate how much your present expenses will amount to at the time of retirement. This is referred to as the future value of money. This is the amount you will need every year to meet your post-retirement expenses.
Over Rs. 30 crores.
Is this achievable?
Yes, it is.
To determine this, you have to factor in the expected rate of return on your investment. This is the value of your savings or investments at the time of retirement.
For instance, if you are able to save Rs 100,000 annually for your retirement, and you invest this amount in an avenue, which earns you 10% rate of return p.a., then after 25 years, you will have a retirement corpus of approximately Rs 9,834,706.
Cutting down on avoidable expenses are your weekly entertainment, impulsive purchases, dining out, foreign vacation, etc. can help you invest more and reach closer to your targeted corpus.
Depending on your current age and the risk that you can afford to take, you should define a standard allocation to each asset class.
It is important to have a diversified investment portfolio across the asset classes like equities, gold, fixed income, etc. Also please do rebalancing it on regular basis. Do not forget, every asset class may not be suitable for you. At the same time, you should not be over-exposed to a single asset class.
Your retirement plan needs to be monitored at regular intervals (at least once a year) to make sure you are on target to meet your objectives.
Thus to build a comfortable retirement corpus, it's essential that you should start saving early, choose good investment products as per risk profile, avoid debt, and timely review the retirement plan. The golden years are a term used to describe the period following retirement. You should get a retirement plan to guarantee that it is everything you anticipated it to be. Here are some of the reasons why purchasing a retirement plan is one of the best investments you can make.
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