How well you planned your retirement determines your quality of life in your post employment years as well as your financial freedom in your golden years. No one wants to see their life savings dwindle or worse be financially dependent on their children. This is why having a concrete plan for retirement is crucial.
Its importance doesn’t make it any simple. A lot of consideration needs to be put into planning the corpus required as well as how that corpus is to be achieved as there are several factors to account.
Some of the factors to take into account are :
- Monthly Income required for necessities and to maintain the current standard.
- To maintain the same lifestyle, inflation must also be accounted for.
- Duration for which the corpus must after retirement.
- Corpus required calculated according to the monthly income required and duration from retirement to death.
- Additional Funds for contingencies such as hospitalizations, medications, the cost and frequency of ballons as we grow older.
While this a good place to start, there can be many other factors according to personal needs.
It is beneficial to start retirement planning early as it gives our principle amount time to compound, thereby giving us a choice to either increase our corpus or reduce the risk.
