0

Retirement- a well planned proposition

by shri Jagendra Kumar

People have different plans for retired life.People dream of retirement to relax,to laze around,and to spend more time with family,traveling or writing a masterpiece.Planning for retirement is as important as planning for career and marriage. The cycle of life take its own course,from the poorest to the wealthiest; no one gets spared “all get old”.Attaining financial independence will not be justa dream if some planned steps are followed with steady discipline,perseverance, and smart investment strategies. Financial planning is the process of meeting your life goals through the proper management of your finances. Financial planning helps you make advance provision for financial needs that will arise in the future.The objective of financial planning is to ensure that the right amount of money is available in the right hands at the right point in the future to achieve an individual’s life goals.

State sponsored socail security:

With Social Security’s assets being consumed and the number of workers that will support it shrinking ,we will have to rely more on our personal savings when its time to retire. We get old every day,without realizing. However ,we assume that old age is never going to touch us. The future depends to a great extent on the choices we make today.Right decision with the help of planning,taken at the right time assure smile and success at the time of retirement .Unlike other countries ,India does not have state-sponsored social security for the retired people.And after several decades when pension provided many people with a large chunk of money they needed to live comfortably after thay have retired ,things are changing.

Sound Retirement Planning

Retirement planning has become of extreme importance for every individual. Although the compulsory savings in the provident fund through both employee and employer contributions should offer some cushion,but it may bot be enough to support you throughout your retirement.While you may be entitled to a pension,or income during retirement,in the new economic era,you are increasingly likely to be responsible for providing for your own needs.What separates the dreamers from the daydreamers is some amount of planning ,a roadmap and some course corrections along the way. With this versatile tool,ypu won't go wrong.it tells you:

1. How much you'd have on retirement if you stopped saving now.
2. How long your savings will last post-retirement.
3. How much you need to retire comfortably.
4. How much you need o save from now to get there.
5. What is expected rate of inflation?
6. How much amount can you save monthly?
7. The intrest rate at which you will make the monthly investment and
8. When do you plan to retire?

As you go along in life,your expense chart goes through considerable change. Give yourself to consider how you think yours will when you input your post-retirement monthly expenses.You might expect considerably higher medical expenses,for example,or that you'll spend far more on indulgences like food and travel,or entertainment.

Retirement Planning tools:

We should not belive that after retirement,we can place all savings into income generating investment and spent rest of life in happiness.If we did not plan early,there could be circumstances where our principal savings will have to be dipped in to supplement monthly income.In such case the saving may even get exhausted.the formula for a financially independent future is"sooner the better".Some popular options are: investement in the savings like:

• Employer Provident Fund Schemes
• Employee pension scheme
• Life Insurance
  
• Medical Insurance
• Govt. of India Saving Bonds
• Post retirement schemes
• Fixed Deposits
• Non-capital guaranteed ULIP Schemes
• Capital guaranteed ULIP Schemes
• Fixed Income Schemes
  

People do not take retirement seriously.But the fact is this that even a small sum of money saved regularly and invested regulrly makes a big amount which will come in very handy after retirement. When we are young and working we think we shall remain in the same state forever and we very conviently ignore the uncertanities of future.Cautious investors beleive in planning their retirment and start saving early.They not only save,they save timely and regularly.

Developing the retirement plan:

Today,we have myriad of options to help each of us prepared.Yet,without a plan of action,many find themselves falling short when its time to retire.Take time to reviewyour options and ensure that you are prepared when its your turn to retire.With retirement palns your monry grows in a tax efficient manner and compounding interest over time makes it one of the best investment options.If your employer offers on pension plan ,understand carefully your benefit level ,financial stability of plan and the vesting period. Saving and investing regulary makes a big difference at the time of retirement.

Investing at regular intervals builds your retirement find over time and helps you to minimize risk and gives a tension free retirement. A well planned retirement is good to fullfill your dreams ,pursue your hobbies and passions.retirement should be kept as a top priority.The goals you keep for saving depend on your life style but you will need at least about 65% of your pre-retirement income to maintain your standard of living when you stop working. Use retirement plans even if you already have enough money.

Asset allocation:

Don't invest too heavily in one sector or one company,sice the risk associated with puuting all your eggs in one basket is indeed very high. Evaluate your risk profile and then balance your investment strategy to  invest in various  avenues to get the most out of your retirement money keeping your risk profile unhampered.Depending on your work profile divide your savings