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Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

These 5 steps offer winning strategies to help you attain your retirement goals during uncertain times. To Know more, Visit Now

  • 4,821 Views | Updated on: Jun 13, 2024

What do you wish to do after retirement? Take up a social cause or get back to your hometown? Start your own business or spend more time with your family? Whatever your dream is, it is important you start saving for your retirement from now.

Once you retire, your monthly income would stop, and to sustain your daily expenses and live a dignified life, you will need a robust financial back-up.

Why is Retirement Planning Important?

With retirement planning, you are well equipped to handle factors such as surpluses, shortfalls and emergencies of finances. A sound retirement plan allows you to:

  • Cover daily living expenses post-retirement
  • Cover your medical expenses
  • Tackle the rising inflation
  • Deal with uncertainties of life
  • Meet your retirement goals plans sooner than anticipated

5 Step Retirement Planning Guide

Step 1: Decide Your Retirement Age

The most common retirement age is 60 years, but it may differ from person to person. For example, one individual would like to work till 65 years of age, while another individual would want to retire early at age 55. Basically, it is a matter of choice.

However, deciding your retirement age early is important because, beyond that point, your regular income would stop, and you would be more dependent upon your savings and investments.

Step 2: Start Early for a Peaceful Retirement

It would be best to plan for your retirement early. Especially if you are young, you have several years in your hand and the power of compounding with you. Delaying your retirement plan might cause you to sacrifice some of your retirement goals or worse, be financially dependent upon your family and children in your twilight years of life.

For example, if you invest in a plan such as Kotak Premium Pension Plan at an early age, it will help you accumulate enough wealth for your retirement while you are earning sufficiently and offer assured benefits to your loved ones in case of your unfortunate demise.

Step 3: Ascertain Your Retirement Corpus

Retirement corpus is the amount you would require after your retirement to sustain the same lifestyle and pursue your post-retirement goals. For this, you need to calculate the current expenses and then calculate your expenses post-retirement considering the rising inflation rates. You can categorise your expenses, such as household, medical, travel, entertainment, EMI, etc.

Step 4: Calculate the Future Value of Your Current Savings

You need to find how much you are able to save each year after meeting all your expenses. You can keep aside a part of your savings towards retirement. The value of money you save today will be far less ten years down the line. Hence, you need to estimate your current saving’s future value considering factors such as the expected rate of return on your investments and inflation.

Step 5: Create a Portfolio and Track Your Progress Regularly

You can seek the help of a professional financial planner to create a diversified portfolio for you. Apart from retirement plans, you can also invest in other assets such as mutual funds, gold, real estate to ensure all your eggs aren’t put in a single basket. Lastly, make sure you track the progress of your portfolio regularly (at least once a year).

Conclusion

Planning your retirement early will allow you to live a financially independent life after your retirement. A reliable retirement plan today can help you live comfortably and worry-free after retirement.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors