Building a Retirement Corpus
Retirement Planner India
Everybody wants to have a comfortable retirement, but to achieve the last goal of the life, one need to plan it properly. Retirement planning and monitoring the same can lead to a smooth and comfortable retirement.
In order to achieve the goal of retirement, one needs to understand few concepts like impact of inflation on retirement corpus, increase in average life expectancy. Retirement planning should be in the list of your priorities when you chart out your goals and objectives.
We list for you a 5-step plan that should put you on the road to retirement planning.
Step 1: Start early
Never delay in planning for retirement. Start as early as possible. Make a list of your financial goals and what you own so you recognize the gap between the reality and your dreams.
When you are young, your risk-taking capacity is high. Earning well, and then generating as high a rate of return as possible, is top of your agenda.
For example, start saving for retirement at age 25, so that even if you wish to retire by 65, you have an investment horizon of 40 years.
The longer the investment horizon, the longer you can save and benefit from compounding. If at the age of 25, you start investing Rs 2,000 per month at the rate of 10% compounding then the maturity amount (when you are 65 years of age) will be Rs 12,648,159; alternatively if you commence the same investment at the age of 35, then the maturity value at the age of 65 will be Rs 4,520,976.
With a 10 year lag, the retirement savings at 65 years is more than halved!
Step 2: Prepare a plan
To achieve the ultimate goal of retirement, one needs to plan it and track it continuously. Plan for the corpus require which can take care of your retirement amount and plan investment accordingly. A systematic approach for investment can actually lead to accumulation of decent corpus for retirement.
Step 3: Hire a financial planner
If you are not in a position to make a workable plan, consult a financial advisor who will help you chart out the same.
Financial Planning can actually help you to come out with the requirement of investment and corpus. It will also help to analyze your risk appetite and risk tolerance. Based on the analysis, you can structure your portfolio, which should Ideally include all asset classes based on your priorities and risk capacity.
In developing a financial plan, your advisor should ideally present a number of alternatives to realize your objectives. Analyze these options from the retirement perspective, e.g. a limited equity exposure over a longer horizon could be vital even if you are a risk-averse individual.
Step 4: Regular monitoring
Your financial plan needs to be monitored at regular intervals to make sure you are on target to meet your objectives. You could do this on your own or take assistance from your financial planner or advisor.
Make sure the plan meets your investment objectives in changing market scenario. Also, understand and get comfortable with the risks, costs, and liquidity of your investments.
Step 5: Do not touch corpus till Retirement
Ideally, one should not touch the corpus meant for retirement, people usually start with right track and built the good corpus, but after certain time period they start using the corpus for different purpose, which deviates one from achieving the goal. One should avoid doing it by planning for the entire life cycle. So that each and every goal can be achieved with out withdrawing the corpus built for retirement.
Planning for your retirement is not a difficult task; the actual challenge is to implementation of the same. We, right horizons, a wealth management and investment advisory, work as a financial advisor. we do financial planning for entire life cycle and help our client to archive the same by continues monitoring and tracking their investments.