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Home / Retirement Planning

Enjoy a relaxed retirement

Retirement Planning

Active retirement should be a time for managed leisure, new achievements, travel, rest, relaxation and dedicating oneself to the service of others. For the individual, it can be all of these things and much, much more with proper planning.

So when can you start planning for retirement? Obviously, it is never too soon. Of late, people’s awareness towards a successful lifestyle during their golden years has increased and the public perception than it cannot be achieved without careful planning has rapidly gained strength.

After retirement, lifestyles seem less attractive than during the working years. And this is largely due to inadequate planning, the effects of inflation as well as the burden of living on fixed or semi-fixed incomes.

Using the concept of Time Value for Money, the age at which retirement savings are begun makes a discernible difference to the future outcome, including the amount of funds invested. The earlier one starts to save means that less will have to be saved in the long run. And this concept teaches one of the most important lessons about planning for money needs in the future.

One of the problems is that most young people are too occupied with providing for today to find the time to map out any real plans for tomorrow. However, this doesn’t lessen the need to plan for retirement nor the risks.

An early start is half the race won

This chart illustrates two investment programs with annual investments of Rs.20000/-. One individual starts at age of 22 and quits investing at age of 30, and the other starts at age of 31.

Note: This chart is for illustration only.

So if you start saving early, you accumulate more even while investing less. This chart proves a point. These figures are based on a hypothetical interest rate of 8 percent. You may not be able to invest Rs.20000/- annually from the time you turn 22 but any amount invested earlier will make a dramatic difference later. The longer your money is allowed to grow at a compounded rate, the more dramatic will the difference be eventually. The message purported here is – Put Time On Your Side.

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