Experts, in fact, recommend that retirement planning should start from the day you start earning. Presenting six steps to help retire in comfort.
1. Budget for retirement
Knowing post-retirement expenses is crucial to retirement planning.
Two ways to do it:
a. Estimate the retirement fund
Every individual needs roughly about 70% to 80% of pre-retirement gross income. Sooner one starts, the better it is. That way even after the paychecks stop coming, life doesn’t.
It’s a good idea to consult a financial advisor on how to create a monthly budget. Many reputed financial firms, like HDFC Life, have formulated retirement expense worksheets, so the help needed to pencil out a budget for retirement is just a click away.
b. Create a detailed monthly budget for retirement
Some expenses, such as those on clothing and entertainment, come down. Others, such as transportation, medicine and insurance, go up. Typically, during the initial retirement years, people spend more on travel and leisure activities, and later, more on health. It is important to note that everyone’s situation is different, so what works for one individual may not work for another.
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2. Start an SIP
3. Get a life insurance
4. Allocate a sizeable portion of any raise to saving
5. Factor in inflation and surprise expenses
6. Don't dip into corpus before you retire
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