Retirement planning - the perfect solution for your golden years

Retirement planning - the perfect solution for your golden years

30 December, 2022

Retirement planning should be a very essential part of your professional planning. A good retirement plan should ensure that life after retirement is free from financial worries as much as possible. It should allow you to feel comfortable and secure. To put this in place, one needs to have good and realistic retirement goals.

What is Retirement Planning?

As you attain financial independence, you begin planning for all expenses, from daily costs to significant milestones. One such period of your life that must financially prepare for is retirement. Essentially, retirement planning entails make moves as early as possible to ensure that you have a financially secure old age. To that end, you can make investments, create a nest egg, purchase policies, etc. The point is to evaluate your retirement goals and make financial choices that will help you fulfil those requirements without stress.

How should you start to plan for your retirement?

To have a worthwhile retirement corpus in place, it is extremely important that the planning starts early. You should take into account your income, expenditures and implement a savings program, that will include both risk tolerance as well as asset management. Future income goals should also be taken into consideration, to understand your actual saving capacity. However, the biggest secret to great retirement planning is to start saving. With a Savings Account, you can set aside some amount of money every month to help you live comfortably once you decide to call it a day at the office.

Non-financial aspects like lifestyle choices, how to spend time after retirement, whether you want to opt for a complete or a partial retirement, retirement age etc. will help determine the corpus needed, which can then be worked towards by saving regularly and in a calculated manner.

It is never too late to start investing towards your retirement, and starting today is always better than starting tomorrow.

Early professional life sees the beginning of the saving phase. During the middle years there is greater emphasis on earning a specific income and living comfortably. The closer you are to the retirement age, there is a marked shift from accumulation to distribution of funds for life after work. Therefore, the people who have a head-start will always be in a comfortable position towards the end.

What are the Steps to Retirement Planning?

To summarise, you can plan for your retirement by following the steps given below:

  • Evaluate your present financial standing.

  • Consider your financial goals when you retire.

  • Understand how much you save currently.

  • Determine how much money you would need to fulfil your financial needs upon retirement.

  • Accordingly, create a savings and investment plan.q

Why is Retirement Planning so Important?

A retirement plan can help in the following ways:

  • Ensure that you have a steady source of income even when you stop working.

  • Plan your life expenses so as to save enough for a financially secure future.

  • Encourage you to invest and save as early as possible.

  • Enable you to have funds to cover any unforeseen expense if it crops up.

  • Can help reduce stress associated with future financial worries.

What should be the goals of retirement planning?

The earlier the goal set, the better. Long term investments ensure a better chance to reach the "magic number" that provides mental comfort. If you dream of a lavish life after retirement, then the amount you save should be either commensurate to that goal. If you start saving later in life, the amount that you need to save may be higher, but in all probability, you would be earning more money later in your career than at the very outset anyway. If you plan to live frugally, then there should still be some leeway so that you can account for unforeseen expenses that arise post retirement. A great idea here is to plan for a certain amount and then set your sights at least 30% higher, so that there is always a buffer in place.

Financial planning and minimising the risks: you can either manage your own funds or take the help of a professional financial planner, but it is extremely important that risks are averted as much as possible. There should be a healthy balance between the risks involved and the returns objective.

What are Retirement Plans One Can Invest In?

A simple way to kick-start retirement planning is to pick a pre-made plan. Retirement plans allow you to begin saving for retirement without having to do much. Many leading brands and financial planners can help you with either pre-made or customised Retirement Plans based on your long-term goals and the kind of lifestyle you hope to lead once you have retired.

HDFC Bank offers lucrative benefits and a hassle-free application process when you apply for a Savings Account. The method of Account opening is completely digital and paperless, and even the KYC process can now be easily completed via video. The interest rates offered by the bank are competitive as well allowing for steady and secure growth of your corpus over time. Click here to open your Savings Account with HDFC Bank.

Want to know more on how to make a savings plan with Savings Account? Click here to read more on how it can help you!

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.