{"id":2307,"date":"2020-04-10T16:25:23","date_gmt":"2020-04-10T10:55:23","guid":{"rendered":"http:\/\/capitalante.com\/?p=2307"},"modified":"2021-01-15T23:00:50","modified_gmt":"2021-01-15T17:30:50","slug":"retirement-planning","status":"publish","type":"post","link":"https:\/\/capitalante.com\/retirement-planning\/","title":{"rendered":"Retirement Planning : How to Make a Successful Retirement Plan"},"content":{"rendered":"

Retirement planning is an important thing for all persons engaged in Govt. Service or Private Service or any other sector where there is provision for retirement after attaining the age of 60 years.<\/span><\/p>\r\n

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A person should think about retirement planning right after joining his\/her job. Early retirement planning will ease the life after retirement.\u00a0 Many a person has some misconceptions regarding planning for retirement and makes some common mistakes.<\/span><\/p>\r\n

Mistake #1. Avoid early retirement planning<\/strong><\/span><\/h2>\r\n

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After getting a job most of people think that they are too young to plan for retirement. They believe that they have much time to plan for retirement. They ignore this vital thing that early planning will secure financial needs after their retirement.\u00a0<\/span><\/p>\r\n

Like this, they spend years after years and when the age of 60 comes close they find themselves with very little savings for the post-retirement life. So a sincere person will keep this thing in mind and try to do planning for his or her post-retirement life.<\/span><\/p>\r\n

Mistake #2. <\/strong><\/span>Unable to <\/b>visualize<\/b><\/span><\/span> the situation after retirement<\/b><\/span><\/h2>\r\n

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First of all, let\u2019s assume that a person gets a job at the age of 25 years. So he will have a service period of 35 years. This service period may vary from person to person and may be of 27 or 30 or 33 years or more. Generally, we can assume that a person has a service period of 30 years.<\/span><\/span><\/span> You must have a clear view and a good understanding of the expenses that will be required to live after retirement.<\/span><\/p>\r\n

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The current inflation rate is 7% per year. It means next year you will need Rs. 107\/- to buy the same product you can buy now with Rs. 100\/-. So if you can fulfill your requirements with Rs. 20000\/- per month now, you will need Rs. 1, 50, 000\/- approximately per month after 30 years assuming a 7% inflation rate. Consider the case of inflation and do the needful.<\/span> \"retirement<\/a><\/span><\/p>\r\n

Mistake #3. <\/strong><\/span>Unable to save money<\/strong><\/h2>\r\n

After getting a job many people spend lavishly. They think this current flow of income will remain forever. They do not focus to save money. Before spending they do not think whether it is necessary to invest the money on useless things. So make savings from the very fast day of your earning.<\/span><\/p>\r\n

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At first, start investing at least 20% of your income. Then increase savings\u00a0in accordance with your salary hike. In this way, your investment corpus will increase year by year. By doing this you are not supposed to become a billionaire but definitely will be able to fulfill your financial requirements easily after your retirement.<\/span><\/p>\r\n

Mistake #4. <\/strong><\/span>Consider kids as retirement corpus<\/strong><\/span><\/h2>\r\n

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There is a conception that children will take care of their parents. So some parents do not value savings for the future and lead a life of luxury and false show-off. But it is needless to say the reality.<\/span><\/p>\r\n

We may witness that children after being grown up do not show interest to bear the expenses of their parents.<\/span> Now let\u2019s understand what to do. You should start investing at an early age in your career.<\/span><\/p>\r\n

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Try to save at least 20% of your income and invest it among different asset class i.e., PPF, NSC, Equity Mutual Fund, Gold, etc. You should continue this till your retirement.<\/span><\/p>\r\n

Be careful not to touch this money for any ordinary financial needs like a tour, buying a Four Wheeler or any luxury items. Do not show off luxury and stop spending on unnecessary things. Make expenses according to your income.<\/span><\/p>\r\n

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You may use your surplus money to pay your must needs like health insurance premium, life insurance premium, etc.<\/span> For any kind of adverse situation, you may create an emergency fund to tackle emergency conditions like health hazards. <\/span><\/p>\r\n

This fund will be your oxygen for post-retirement life. Last of all hurry up! You do not have much time left. Your retirement is knocking the door. You will not even realize when these 30 or 35 years have crossed.<\/span><\/p>\r\n

How to Calculate Retirement Corpus<\/strong><\/span><\/h2>\r\n

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In order to make an early retirement, you need to plan from the moment when you start your first earning because you have to build a reasonable bank balance to secure the standard lifestyle after you get retired at the age of 60. The answer varies on the following factors.<\/span><\/p>\r\n

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