Planning for retirement? Is Rs 1 crore sufficient?

1. Retirement Plans

2. Planning for Retirement? Is Rs 1 crore sufficient?

3. Planning for retirement is desirable and thanks to the increasing awareness levels, more and more people are getting conscious of this aspect early on in their lives. • But what raises concern is that most people are not making plans which are realistic. Here is a case in point. • He finds that his annual expenditure is close to Rs 7 lakh. That means, in order to save for retirement, he needs to have a corpus of around Rs 80 lakh so that even if he gets 10 per cent interest from bank fixed deposit, it brings him a cool Rs 8 lakh a year. • Do you think that he is treading on the right path? No, not at all. Wondering, why? • Well, planning for retirement should be done on future requirements and cash flow, and not present. Inflation is the biggest culprit which can spoil all of your plans, quietly and surely. • If you are 30 years of age today and your story is similar as Rakesh, then you have to think again. After 30 years, that means when you achieve the age of 60 years, your expenses will be 10 times than present.

4. That too when we take into account an average rate of inflation at 7-8 per cent a year. This is the best case scenario. If prices and cost of living go up with greater pace, then you require much more. • Needless to mention that your expenses will increase in future considering requirements of your children and your family. You have to essentially think about education, marriage, health among other things. • Therefore Retirement Plansfor a corpus of Rs 80 lakh at the retirement age of 60 years, do factor in inflation. • Try to save more and to the extent that you set aside at least 10-15 per cent of your income into pension plans. • Many people also prefer to invest in real estate and gold, in order to earn handsome returns and rule out perils of inflation. It is a good strategy but at the same time, do not rely on 1-2 types of asset classes.

5. Diversify your risks so that you do not get stuck at a critical stage. Remember that real estate is a highly illiquid asset class and you may not be able to sell it instantly in case of an exigency. Gold is still better in this case. • Financial instruments are much more flexible and can be liquidate over a period of time. The lock-in period is for the initial 3-5 years, and after that you get options to take an exit route at your discretion. • These days, the finance and insurance industry in India is bringing a host of magnificent plans which can help you achieve your retirement goals easily and in a much better way. • So, just do not get nervous. There are ways through which you can plan for your retirement without hassles. • So, what are you waiting for? Just key in a few details about yourself and start comparing the best possible plans available in the market at a click of a button. Happy investing! • [http://www.policyx.com/blogs/planning-for-retirement-is-rs-1-crore-sufficient/]

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