Saving for retirement is often the last item on your budget and the first to be cut in favor of other priorities. (Representative image: Shutterstock)
Without a good retirement plan, people may not be able to afford the same lifestyle they are accustomed to during their working years.
Retirement planning is critical in India to ensure financial security and a comfortable lifestyle in old age. It is essential to start planning early to accumulate enough money to support yourself in retirement.
With advances in healthcare and medical technology, people are living longer. Therefore, they need to plan for retirement to ensure they have enough money to maintain their lifestyle and care needs during their retirement years.
The cost of living is also rising rapidly. Experts therefore believe it is important to have a retirement plan that takes into account the impact of inflation on the cost of living.
Without a good retirement plan, people may not be able to afford the same lifestyle they are accustomed to during their working years.
Ajay Lakhotia, founder and CEO of Stockgro, said it is very important to understand the importance of balancing short-term goals with long-term planning.
Why is investing early important in retirement planning?
Starting to invest early is crucial when planning your retirement because it allows you to take advantage of the power of compound investments.
Compounding is the ability of an investment to generate income not only on the initial amount invested, but also on the interest or income accrued over time. (Read more about composing here)
The sooner you start investing, the more time your money has to grow through compounding. Investing early gives your money more time to work for you and gives your investments more time to recover from any market downturns.
Also read: Retirement planning: 10 tips for Gen Zs to secure their future
The earlier you start investing, the more time you have to save and grow your retirement savings, and the more money you have available when you retire. For a comfortable retirement, it is always advisable to start investing as early as possible.
Here are five steps suggested by Lakhotia to help you ensure a safe and satisfying retirement;
1. Discover your destiny: calculate how much money you need to live the life you want after retirement.
2. Early Birds Catch the Worm: The sooner you start investing, the more time your money has to grow. Make it a habit to squirrel away a portion of your income each month.
3. Diversify or Die: Don’t put all your eggs in one basket. Spread your investments across multiple asset classes to reduce risk and maximize growth.
4. Hands Off the Cookie Jar: Retirement accounts are for your golden years, not your midnight snacks. Avoid withdrawing money and let it grow.
5. Expert help is just a phone call away: If you feel overwhelmed, seek the help of a financial advisor. They help you navigate the confusing world of retirement planning and make sure you’re on the right track.
Remember, retirement planning is not a one-time event, but a lifelong journey.
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