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When should I start saving towards my retirement?

The best time to start saving for retirement is today. High inflation, long work years, lack of family support system, and an increasingly consumption-driven lifestyle means retirement is going to cost you and you are on your own! If you have not already started saving for retirement, please start today. The earlier the better! It doesn’t matter if you have just started earning and are not yet married. In fact, planning for retirement should start right from the beginning of one’s career and not the other way round. Investing for retirement now and following a disciplined approach throughout your working years will ensure that you are sufficiently prepared without being excessively burdened during the later years. For instance, if you are 30, and expect to retire at the age of 60, and your annual household expenditure is Rs. 3 lakh, you will need a retirement corpus of Rs.4.33 crore at retirement (Assuming inflation at 7 per cent, life expectancy as 80 years, and the post retirement return on corpus as 8 per cent). Now if you start saving every month from today for the above retirement corpus till the age of 60, at 10 per cent rate of return, you will need to invest Rs. 19,024 every month. But if you start saving at the age of 40 for the same target corpus and rate of return, you will need to invest Rs.56,630 every month. The cost of postponement is thus very high!

A word of advice

■ Do consider the impact of inflation

■ Follow a disciplined approach towards saving and investing

■ Do not stop the regular contributions or prematurely withdraw from the corpus as far as possible

■ Choosing the right asset class for your investments is very important. Seek help from a trusted and expert investment or financial advisor

■ Plan for medical exigencies such as healthcare

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