Today we are going to talk about a topic that is extremely important for everyone, whether you are in college, working, or close to retirement – and that is retirement planning. As long as we are working, everything seems fine. But the real question is how will we manage our expenses when we stop working. Retirement planning means saving some money from now and investing it in such a place so that you do not have to worry about money in the future. It is like laying the foundation for your bright future.
Monica Halan says in her book ‘Let’s Talk Money’ that the sooner you start preparing for retirement, the better. Because money takes time to grow and if you start early, the benefits in the future will be much greater. This is an undeniable truth that we must understand as soon as possible.
How to prepare for retirement
Preparing for retirement does not happen overnight. For this, you have to plan thoughtfully and gradually. Here are some very effective ways you can start preparing for your retirement:
Think about the kind of life you want to have after retirement
Would you like to manage only household expenses, or are you planning to travel as well? You will need money to live the life of your dreams. Get clear about your aspirations.
How much money will you need
What you spend every month today will remain roughly the same in the future, but will increase slightly due to inflation. You need to always try to earn at least 70% to 80% of your current income value every month even after the retirement. This is very essential to timely maintain your standard of living life.
Where to invest for retirement
Investing in the right place for retirement is the foundation of your financial security.
NPS (National Pension Scheme):- This is a government scheme where you invest a small amount and get a good amount and pension after retirement. It also saves taxes.
Pension Plans:-Insurance companies provide plans where you can invest money and later get a pension every month.
Mutual Funds:-If you can take a little risk, investing in mutual funds is good! As retirement approaches, you should choose safer funds like debt funds or hybrid funds.
Planning for retirement is not a one-day job. The sooner you start, the more peaceful your old age will be.