Imagine yourself on a beach in Bali, sipping a cocktail and watching the sunset. You’re retired, and you have all the time in the world to do whatever you want.
This is the dream retirement for many people. But the reality is that many people are not prepared for retirement. In fact, 43% of Indians believe their savings will be exhausted within 5 years of retirement. And 40% of urban Indians have not invested for their retirement so far.
These statistics are alarming, especially considering that people are living longer than ever before. Individuals in their 30s and 40s today could potentially spend 20 to 30 years in retirement.
But it doesn’t have to be that way. With a little planning, you can secure your retirement and achieve financial independence.
Retirement is like a long vacation but without the paychecks.
That’s why it’s important to start planning for retirement early. But according to a recent study, 90% Indians above the age of 50 years regret not starting to save for retirement early. This is alarming, especially considering that people are living longer than ever before.
Do you feel lost when it comes to retirement planning? You’re not alone. In fact, 24% of Indians feel overwhelmed and lost when it comes to retirement planning.
Here are a few tips to get you started:
- Start by setting a retirement savings goal. How much money do you need to save in order to live comfortably in retirement? Once you know your goal, you can start to create a plan to achieve it.
- Choose the right investment products for your needs. Various investment products are available, such as Mutual Funds, NPS and Provident Fund . It’s important to choose products that are appropriate for your risk tolerance and investment goals.
- Invest regularly. The key to successful retirement planning is to invest regularly over time. This will allow your money to grow through compound interest.
The Million-Dollar Question: How Much Do You Need for Retirement?
There’s no one-size-fits-all answer to this question, as the amount of money you need will depend on your individual circumstances, such as your desired retirement lifestyle, your age, and your health.
However, a general rule of thumb is to multiply your estimated net annual living expenses in retirement by 25. This is known as The 4% Rule, as it advises you not to withdraw more than 4% of your retirement savings per year in order to fund your retirement for at least 30 years.
For example, if your monthly expenses in retirement are Rs. 1 lakh a month, your annual expenses would be Rs. 12 lakh a year. To become financially independent, you would need to have Rs. 3 crore saved for retirement (25 * 12 lakh = 3 crore).
