Best Time for Retirement Planning – 10 Years Back. Next Best Time – Today
For most people in their 40s and 50s, the best time for retirement planning was 10 or even 20 years back. However, if you have failed to do so, you can always start now. It is never too late to secure your future or retired life. If you are worried about your retirement plan even though you are decades away from it, you are probably on the right track. Retirement is an important stage in our lives that should be planned out well and at the earliest. This is especially due to a lot of retired professionals being unable to actively earn money as they could while they were young. There are both government schemes and private companies offering great retirement benefits. You can truly benefit from these opportunities if you start in time. Most of the time, saving money through the bank is not enough and also does not compound enough to beat inflation. Retail inflation has risen by 5.59% during December 2021. Just the CPI (Consumer Price Index) Food inflation has gone up by 4.05% in December compared to 1.87% in November of FY 2021 – 2022. Meanwhile, banks generally only offer us 2.50% p.a. to 3.50% p.a. interests on the money we keep with them. Even though Fixed Deposit schemes almost are at par with inflation (offering around 2.50% p.a. to even 5.75% p.a. returns), it is still not enough. Consider
that there are also taxes and other economic factors that erode your returns over time. Thus, it is always best to employ the help of schemes that are specifically designed for retirement and that come with a list of retirement and tax benefits. These schemes reduce the taxable earnings of an individual. What is even better is that the earlier you start, the cheaper the premiums will be. For example, retirement schemes will be much cheaper for a 20-year-old as compared to a 50-year-old. This is because age is counted as a factor while determining the amount of premium to be charged. Also, the sooner you start to save, the more money you will end up saving and the longer will be the time horizon for you to gain the benefits of compounding. Let us understand how retirement planning differs in every stage of your life. Retirement planning during your 20s During this stage, most people generally wish to enjoy their lives and have fun. However, it is important to strike a balance. If you decide to start saving or investing money now, it cannot get better than this. At this age, one is generally free from family responsibilities, such as paying for your children’s education or EMIs for a house or a car. The total sum you can save up is incredible. You will also be enjoying very low premium amounts due to your age. 5 Habits To Build A Healthier And Wealthier 2022 – Read our article on the TejiMandi blog for expert tips! Retirement Planning During your 30s By this age, you need to start taking care of your family or start planning for marriage or even kids. Thus, you have more financial responsibilities as compared to those in your 20s. However, this can still be considered an early start as the financial burden is still quite less than later stages when you would have grown-up children who need to go to college. You have a lot of time to build up the corpus amount even if you invest a little bit of money every month or every year into your retirement plan. For starters, you can set aside an amount to invest in equities for the long term. You still have a long time horizon over which you can benefit from the effects of compounding. TejiMandi helps you navigate through the stock market. The experts help you find the stocks that suit your risk profile and keep you on track to reach your financial goals. Read more about retirement plan