The Ultimate Guide To Retirement

On the surface, retirement planning is no rocket science. You work hard all your life, you save, and you retire. However, to have a comfortable and fun retirement, you need to build a corpus – big enough to fund it all. But before you reach this fun part of life comes the not-so-fun part – where you plan the steps to reach there.

As the life expectancy has increased in the country, you have a good 20-30 years of retirement life ahead of you. And to have a secure retirement amidst the soaring living costs, it's time you start planning. But how? By making the right investment decisions, starting now.

Here's a quick guide to help you plan your retirement better.

Decide your retirement age

At what age do you plan to retire? While the most common age to retire is 60, it entirely depends on you and your financial goals. Establishing your retirement age is a critical step in determining the time you have to plan your retirement. Ideally, you need to start planning right from your 20s because the sooner you start planning, the longer time your invested amount will have to grow.

That being said, it's never too late to plan your retirement. All you need is a strategic investment approach to make every dollar count.

Evaluate your retirement corpus

Financial planners recommend that a person will need about 80% of their pre-retirement income to continue the same lifestyle after they retire. Of course, it also depends on various factors such as the time you will retire, how much money you plan on spending, do you have any debts to repay, and so on.

Not to mention, the post-retirement period will give you more time to indulge in activities you love – travelling, sightseeing, picking a new hobby, and managing other expenses. So, you must have an accurate estimate of your retirement corpus in order to live a comfortable life.

Determine the investment options

Retirement planning is not just about how much you save but where you save it. Typically, the notion is to invest aggressively when young and readjust your investment plan to a conservative mix once you're nearing retirement age. This is because, in the beginning, you have enough time to tackle the market fluctuations – with plenty of time left for the money to grow.

Depending upon your financial goals and risk tolerance, you must assess the investment options available to you and the return they offer. You can select one or more options from a wide range of investment instruments-

• Stocks
• Mutual funds
• ETF
• Bonds
• Gold
• Pension funds

By investing in the right mix of securities, you can leverage the power of compounding to maximise your returns.

Diversify your portfolio

The world of investment functions on one simple rule – Don't put all your eggs in one basket. When it comes to a long-term investment strategy, diversification is vital. Having a diversified investment portfolio across various asset classes will let you earn regular returns over the period while reducing the overall risk. You can achieve this by taking the following steps-

• Invest in multiple asset classes

You can invest your funds in different asset classes, including cash equities, bonds, securities, and property. For instance, certain assets like equities can offer you a better real rate of return, while gold can offer a store of value in your portfolio. By spreading your investments, you can maintain a better balance between risk and good returns.

• Focus on different industries

Along with spreading your investment across asset classes, you must consider making stock investments in different industries too. All industries have their own growth curve, so it is wise not to limit your investments in one industry.

Finally, it is best to keep reassessing and monitoring your retirement plans regularly to ensure you're on the right track. This way, you can also readjust your investment plans based on the changing market scenario.

Over to you

Timely retirement planning is essential to achieve the same stability even after you retire. Make sure the investments you choose help you reach your retirement goals faster at minimum risk. And when you're ready to start planning, download the Moneyfy app.

Browse and compare the various investment options and plan your retirement on the go!