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During your active working years, you might strive hard every single day to prove your mettle. While you might be passionate about your work, you might also continue to work throughout your lives due to financial barriers. According to a survey, 79% of the Indian employees choose to work after retirement.
After retirement, the flow of your professional can stop. Since there might not be any other source of income, you might fear the depletion of your resources. Therefore, you might be willing to save as much as possible by working rigorously even after reaching the retirement period. If you want to retire with adequate funds, you should take a look below to understand how much money do you need to save for your retirement:
- Consider your retirement age
In India, the usual retirement age can be between 55-60 years. However, the younger generation might be willing to retire early between the age of 45-50 years. Before retiring, you should consider your retirement age since it can impact your savings. For instance, if you plan on retiring early, you should start saving money in your early 20s after you receive your first pay check.
Retirement planning can direct you towards the amount of money you should save for your retirement. When you start your retirement planning at a young age, you can be able to build a large corpus for the golden years of your life. An early retirement plan can help you to grow your corpus since you might have more time in your hand to reach the retirement period.
- Analyse your post-retirement lifestyle
Retirement can mark the beginning of the golden years of your life. While many of you might wish to achieve your post-retirement goals like traveling, pursuing new hobbies, buying a new car or house, etc., some of you might aim to live a comfortable and relaxed life at home. Therefore, you should first identify your post-retirement lifestyle before saving money. Typically, your post-retirement lifestyle can be divided into three categories:
- Comfortable
If you want to live your current lifestyle after your retirement, you should save 10X of your professional income.
- Lavish
If you aim to fulfil your post-retirement goals, you should save more than 10X of your income.
- Simple
If you want to live a simple life wherein you get to fulfil the routine expenses after your income stops, you should save 8X of your salary regularly.
- Track your investment portfolio
While savings can play a crucial role in your retirement, investing at a young age can help you to grow your hard-earned money. When you are young, you should invest in the equity funds of a Unit-linked pension plan based on your risk appetite. An equity investment under a retirement investment plan can allow you to receive high returns based on market performance.
As you grow older, your risk appetite can decrease due to an increase in your financial responsibilities. When your risk appetite recedes, you can switch to debt funds and secure your funds from market risks. With a unit-linked pension plan, you can not only diversify your investment portfolio but also accumulate your funds to meet your life goals after retirement.
To sum up, retirement might not be about age anymore. However, the amount of money that you save can speak a lot about your retirement period. Moreover, saving and investing at a young age can help you to reach your targeted figure to the soonest. Therefore, see to it that you attain an accurate balance between your savings and investments by using a retirement calculator today.
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