Retirement Planning: Mapping Out Your Financial Future in 5 Simple Steps”?

Have you ever considered what your life would be like post-retirement? If yes, comfort and peace are what you must have hoped for. Taking action towards making this a reality will be something that you should definitely try. But do you feel that retirement planning seems overwhelming?

Then, let’s simplify it. Retirement planning means exactly what it appears to be: a plan for your retirement age. Planning gives you direction, which can help you strategize, organize, implement, review, and relook at your progress. Retirement planning can begin as early as possible, depending on your actions, level of intent, and comfort. It is obvious that you start with less money to invest, but gradually, you can increase it every year.

Let’s find out how you can do retirement planning in 5 simple steps:

1. Determine your corpus: A mid-level career professional can easily determine this by estimating their peak level of income. This annual level of income is your basis for determining your retirement corpus.

Multiply this income by 15 times to get a lump sum figure of assets that you should have.

Your assets should contain a mix of debt instruments, equity exposure, recurring income products, decent liquidity, an emergency fund, and a comprehensive health insurance policy.

2. Spend wisely: In the initial days, determine how you can reduce your expenditures to save more. One way to do so is to reduce unnecessary expenses and impulse purchases.

3. Begin investing early on: Invest at least 30% of your income to ease your retirement planning process. When you invest early, you get the chance to have time on your side. This allows you to realign with your goals, if needed, when your retirement planning is going haywire. Otherwise, if all things work out well, your investments can benefit from the power of compounding.

Compounding can help you achieve your goals beyond metrics for your retirement planning.

4. Get comprehensive insurance: Your retirement planning should include medical insurance and life insurance. Medical insurance will help you save money when a health crisis comes up. Medical expenses are on the rise. These can cause your finances to bleed dry. Hence, having medical insurance becomes inevitable.

If you are the single-income earner in your family, getting life insurance is key. In situations where you may meet with an unexpected death, your beneficiaries will get the benefit of the sum assured. The primary purpose of the same is to provide your family with a sum that can help them lead their lives with ease.

5. Consult an advisor if needed: Talking to experts will always help. They will help with tax planning and figure out benefits if needed.

Tax planning is important because it can help you save on paying taxes in a systematic manner. You can also let them handle your portfolio so you can get closer to your retirement goals. Ensure that you have working knowledge at a sufficient level to avoid getting trapped in incorrect products.