At What Age Should You Start Your Retirement Planning?
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At What Age Should You Start Your Retirement Planning?

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  • 27th Apr 2022
  • 2,570

At What Age Should You Start Your Retirement Planning?

“A thousand-mile trip begins with a single step!”

The saying goes true for everything big that comes to you in life, be it the achievements or something you get after a lot of hard work. Retirement planning is no different. It is more of a science than an art. It’s like a large network of financial plans that all connect in some way, necessitating a holistic strategy that takes into account all relevant factors.

Retirement planning aims to help you maintain your desired lifestyle in your later years, keep you financially prepared for major life events, and ensure financial stability for you and your dependents.

For people in their early 20s, 30s, or even 40s, a big question like when to start planning for retirement may seem like a question long way off. However, everyone must understand that making effective retirement plans at an early age is an important aspect of financial planning. Having a retirement plan in place as soon as you start a new job helps you avoid medical emergencies, fulfil life goals, and become financially secure.

Saving for retirement means deciding on financial investment options and putting money away to help you live comfortably and achieve your life objectives once you retire. When you start a new job, you should invest in a decent retirement plan that can help you get a clear picture of your long-term goals and how to get there. Here are a few reasons to start planning for early retirement:

Start Planning Your Retirement at the Earliest. Here’s Why

  • Good ROI

There is only so much to keeping your hard-earned money in a savings account. Choosing the right investment instrument is the key to generate more returns over the years. When you start early, you have more flexibility towards choosing an investment instrument and a lot of time to rectify financial mistakes.

At the same time, investing in these high-return instruments like equity or mutual funds makes it easier to earn higher returns. You’ll make more money and get greater returns on your financial assets if you start financial planning at a young age or when you start a new job. Investing as soon as possible in a pension plan also helps you maximise your earnings by giving you more verifiable profits.

  • Tax Benefits

If you start saving and preparing for retirement as soon as you get a job, you will be able to take advantage of various tax benefits that you may not be able to take advantage of if you wait until later. For example, you can easily claim tax deductions on the premiums for retirement plans under Section 80C of the IT Act of 1961. Additionally, retirement plans might assist you in increasing the size of your tax returns.

You don’t want to have to deal with financial concerns in the future if you have a medical emergency. This might mentally weary you and your loved ones. As a result, if you are the principal breadwinner in your family, you must begin saving for retirement as soon as you begin working. Investing as soon as you start a new job will allow you to save as much money as possible, allowing you and your family to enjoy a happy and secure life. Furthermore, in the event of your death, these investments will assist your family in maintaining financial security.

  • The Big Picture

As you grow and move further in your life, more serious questions like what age should you start planning for retirement might haunt you. At that time, planning or building a retirement corpus might seem a little more difficult than when you are young. These are big financial decisions that cannot (or should not) be undertaken in isolation. Knowing where you stand with your retirement savings offers you the insight you need to make wise choices. This allows you to make better financial and personal decisions as a result.

You strive to live life to the fullest. When to start planning for retirement is the question everyone should think about at an early age. So, choose the right retirement plan and enjoy endless enjoyment and security instead of limited options.

- A Consumer Education Initiative series by Kotak Life

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