How to plan retirement to make it worth 30cr.



Every one of us has hopes and plans for our golden years. We want the freedom to do whatever we want, and we hope to be able to satisfy all of our desires that were unfulfilled during our working lives. It will only be achievable if we have carefully planned ahead of time and have the cash to make our aspirations a reality. As a result, start making plans now for a wonderful post-retirement life. Today it is the thing that most people do not focus on one of the most important goals – Retirement Planning. The solution lies in accepting retirement as an eventuality and being adequately prepared for it. Making an early start is your best bet at being prepared.  

What is Retirement planning?

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.

  1. Current Age – 25 Years
  2. Retirement Age – 60 Years
  3. Life expectancy – 75 Years
  4. Target Corpus – 30 Crores.

SO, let's take a deep dive on how to plan retirement to make it worth 30cr. 

How to plan retirement? 

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.

How much will he need to retire and maintain his current lifestyle?

Over Rs. 30 crores.

Is this achievable?

Yes, it is.

The three steps for Retirement planning are:

 Calculate The Future Value of Your Current Savings

  • How much you are able to save every year, after meeting all your expenses, plays a crucial role in building your retirement corpus.
  • To earmark a portion of your savings towards retirement.
  • To find out its future value.

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.

Cut Down On Unnecessary Expenses

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.

Plan, Create, and Review Portfolio

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.

To know more about financial planning, and portfolio management click here to explore more investment opportunities click here.

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