News, hoardings, articles, and Government schemes - we get to see so many forms of awareness for retirement planning. But how many of us take them seriously? A very few. We either ignore them thinking that it's a mere marketing gimmick or we feel that there's a lot of time to think about it, why now? Let us here discuss first why we need to think of our retirement planning now.
On the contrary to many beliefs, retirement planning is one of the most critical tasks in life and typically takes a lot of time to accumulate the necessary funds for the future. So, the sooner we start, the better it is. Moreover, as we start approaching our old age, we become weak and incapable to work hard and earn for our family. Then savings necessarily becomes an important source of income in our daily life. Also, health problems start accruing due to which medical expenses surge and cause a dent in our post-retirement income. For all these, we need to start planning and investing for our retirement as soon as we can. Now, let us check how.
Keep 10% of monthly income aside: The very first rule of savings for retirement is to start saving your hard-earned money as early as possible. Ideally, we should keep 10% of our monthly income untouched so that it can come to our rescue in our post-retirement life. If it seems difficult to some of you then try to curtail your less important expenses.
Do not consume the savings recklessly: Usually, what works in the back of our mind is that we have adequate savings in our bank with which we can settle our credit card bills and other expenses for now and the rest we will see in the future. This approach should be changed and the best way to do this is to completely forget about the savings we have until it is something extremely urgent and unavoidable. Otherwise, be strict with yourself for not consuming the savings.
Invest in National Pension Scheme: Though there are many investment vehicles where we can invest our money for the future, National Pension Scheme in India is one that has been specially designed by the Government for all the citizens. The purposes of this scheme are to provide a retirement income to the citizens, institute pension reforms and inculcate the savings habit among the citizens. The scheme is transparent, flexible, and simple wherein the subscribers get a unique Permanent Retirement Account Number (PRAN) with which they can access their accounts anytime and from anywhere. The investment cost in this retirement plan is also very low as compared to other investment products in the market. The National Investment Scheme Returns arrive in the form of a lump sum amount at the retirement and a fixed monthly income for the lifetime.
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