What is the correct age for retirement planning?
Planning your retirement is one of the most important parts of your financial goal. Read on to find out the correct age to plan your retirement and how should you go about it.
Over the years retirement has turned from being a more objective topic to being a more subjective one. In older days, that is at the time of your father and grandfather, the retirement was quite objective in nature. Mostly they use to pick up a job during their 20s after graduating and worked up to the age of 60.
Although voluntary retirement was the concept, that too was quite objective. However, these days people are moving towards the concept of Financial Independence and Retire Early (FIRE). Today, we have a lot of people striving to achieve early retirement in their 40s. Therefore, our retirement planning should also shift to account for this subjectivity.
Moreover, even when it comes to planning for retirement, people often have an understanding of it as planning post-retirement. However, this is a misconception. Retirement planning is a blueprint that will help you glide your retirement period comfortably without having to face a cash crunch. Therefore, it needs to be done before you actually retire.
The correct age of beginning to plan for retirement is the age at which you start your job. To put it in numbers most probably one would retire at the age of 60 and your 30s is the perfect time to contribute towards retirement. Maybe initially you won’t be able to contribute much, but there should be a mandatory contribution towards retirement.
You can even start investing for retirement at as low as Rs 500 per month. By saving Rs 500 per month and to achieve Rs one crore in 30 years, you need to step-up a Systematic Investment Plan (SIP) every year by 18%.
Having said that, try to make retirement one of your priorities. This is because it is the period wherein virtually you won’t be earning and even if you do in the form of pension or rental yield, your expense would be higher than what you will actually earn. Therefore, there is a need to have a proper retirement plan in place.
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