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Retirement Planning - Process

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 Retirement Planning
• Increase the volume of investment with increase in income: Starting from the
earlier phases in life, choosing an investment that yields dividends as and when
required is very essential.
• Start early: The cost of living in India is on an upward spiral and this makes us feel
the pinch with each passing day. Therefore, it is important to start investing in
your future as soon as you start earning.
• Allocate a fixed percentage of your income towards retirement corpus: Investing
a fixed percentage of the income towards the main retirement corpus always
helps.
• Consider the inflation factor while taking a retirement plan:  Seeking to invest
and build up on that investment is important. However, the fact that inflation
affects the financial planning heavily must never be ignored or belittled.
• Invest in health-insurance and specific plans simultaneously: You may not be in
the prime of your health in your sunset years and therefore, start early when it
comes to building up the financial safeguard in times of emergency. This ensures
that your savings and the returns from the investments made by you do not suffer
due to medical contingencies.
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 Stages in Retirement
• Accumulation Stage
• Distribution Stage

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Take the case of two people who have to save Rs. 1 crore each as their retirement
goal. Both want to retire at the age of 60. One starts at 25 years of age and the other
at the age of 35. The contribution required is as below if the rate of return is taken as
12% per annum.

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 Retirement Planning Process
• Understand your Time Horizon
• Determine Retirement Spending Needs
• Calculate After-Tax Rate of Investment
Returns
• Assess Risk Tolerance vs. Investment Goals
• Stay on Top of Estate Planning
Source : https://www.investopedia.com/articles
/retirement/11/5-steps-to-retirement-plan.asp
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