Retirement Planning is the process of planning for a comfortable living after your earned income disappears. To avoid trouble down the road it is important to understand the various aspects concerning retirement planning.
Retirement Income planning consists of Personal planning and Financial Planning.
Personal planning involves identifying hobbies and activities that you would want to pursue after your working life is over. Wherein financial planning is used to identify the investments that will fulfil your future expenses after Retirement.
Foolproof Steps To Retirement Income Planning
- Identify & compare your income and expenses to determine any shortfalls or surpluses.
- Use our online Retirement Planning calculator to know how much upfront or SIP investment is required.
- Review & analyze the various retirement income strategies.
- Develop an action plan.
Investment Avenues To Create Your Retirement Fund
When we look across all the investment avenues available to save for your Retirement, we apply a general filter of Safety of Investment that guarantees a payout as income. We also need to beat inflation by around 3-4% only. Keeping this in mind, let us look at a few options that you can consider as avenues to create your retirement fund –
- Public Provident Fund (PPF):
Public Provident Fund or PPF is one of the most popular age-old retirement planning strategies. However, PPF is popular with entrepreneurs for another reason. PPF was created specifically to give people incentives to save for retirement.
- Mutual Funds:
The most sensible retirement portfolio is through the Mutual Fund route which can be created through a systematic or a lumpsum manner. This is something that most people are aware of but does not do it as systematically as they should!
You may create your retirement portfolio SIP in equity funds or lumpsum investment in liquid or debt funds and then systematic transfer or STP into equity.
- National Pension Scheme (NPS):
You can opt for NPS along with other traditional retirement options like PPF. Thus, this option gained maximum popularity primarily because of an additional tax saving investment of upto Rs. 50,000. This investment can be done over and above the 1.5 lakh 80C limit.
This is a secured pension scheme approved by the Central Government wherein, a citizen between 18-60 years of age can contribute a minimum of 6,000 per year. This is investment option; you can choose both equity as well as debt in a chosen combination of the two.
Save Now & Enjoy Retirement Later
If you’ve yet to start saving for retirement, make 2019 the year you ramp up. That’s because the more time you give yourself to grow your savings, the more you’ll get to take advantage of compounding growth. That’s why with effective retirement planning, you can save now and enjoy later
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