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Why Should Retirement Planning Be on Top of Your Priority List?

Improper retirement planning makes it difficult for many people to live their retired life as they've always imagined. Here are the reasons why should retirement planning be on top of your priority list.

  • 2,738 Views | Updated on: Jun 14, 2024

As you reach your late 20s and early 30s, you get so occupied in fulfilling the personal and professional responsibilities that you tend to lose sight of the future. As a result, retirement seems a distant thought and not something you should be concerned about, at least for a couple of decades.

Unfortunately, this approach towards retirement planning makes it impossible for many people to live their retirement years as they’ve always imagined.

Here are some reasons why it makes sense to start planning your retirement once you get employed.

1. Money Needs Time to Grow

If you know anything about the world of investment, you might know that it takes time for your investment to grow considerably. You provide your investment with adequate time to grow as per your risk appetite when you start early. More importantly, the younger you are, the more affordable the investment journey is with most retirement products such as annuity plans.

2. Build a Larger Retirement Corpus

When you start investing towards retirement, which is probably 20-30 years away, you cannot avoid considering inflation. The life expectancy is rising, and the medical costs have been increasing consistently as well. All these factors call for a larger retirement corpus that could take care of your basic expenses and medical costs, preferably for you as well as your spouse.

By starting early, you get more time to be aggressive with your investment approach. You can consider asset classes like equity that come with a higher level of risk but exceptional returns potential. Once you reach your 40s-50s, debt instruments are a better choice as they are safer, but the returns potential is mostly limited.

3. Be Financially Independent

You’d like to live a financially independent life as long as you live. Moreover, you’d also want your family to enjoy a similar life. But without adequate retirement planning, you might have to depend on your children or even sell off your assets to keep up with the post-retirement expenses.

With products such as annuity plans, you can regularly invest a fixed amount during your working years for building a retirement corpus. The plan provider will then start paying regular pensions to you once you retire. While private employees have options like PPF and EPF, they often fail to beat inflation and require additional investments such as annuity plans.

4. Death Benefit and Other Riders

Apart from retirement, death is another aspect that people don’t generally like to think about, especially when they are young. But it is an unfortunate and inevitable truth of life that one should plan for in advance. Most retirement planscome with a built-in death benefit that provides the nominee with a lumpsum pay-out in case of the policyholder’s demise.

This pay-out could help your family live a financially stable life in case of your unfortunate demise. Some insurers also offer other riders such as accidental death benefits and permanent disability benefits for enhanced financial security to you and your family.

The Right Time to Start Planning Your Retirement is Today

As can be seen, several reasons make it essential for you to start planning your retirement right from when you are in your 20s and 30s. Moreover, different types of saving and investment products could add direction and stability to your retirement plan. Get in touch with a reputed insurer to know more about the available products and choose ones that best meet your retirement objectives.

- 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

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