When Retirement Planning Is Not About Getting Old

What I… retire, no way? Well, at the age of 25 years, the thought of retirement may not be the first that you will be having when you receive your first salary. At a young age, the idea of having a retirement plan that will take care of your needs at old age will be the last priority. Yet, the earlier you begin your retirement planning, the better your returns will be at an old age.

Are you getting old? – No, of course not

Planning for one’s retirement does not mean that you have begun ageing. It is a plan that takes care of you at your old age. The common age for retirement considered across the world is 65 years. The working span for most individuals is around 30 to 40 years. Even considering life events like marriage and children, investing in a retirement planning should be considered as a component before these events occur. As much as you would not like to think of the future given the present needs, the idea of beginning a retirement plan should be considered as vital as an insurance scheme. Having at least one of these plans can determine the comforts at an advanced stage of your life. Investing in high returns in the short term can build your savings. Market related investments and other regular investments are different from that allocated towards retirement.

Let’s take a look at the numbers to get an idea of what’s one’s returns could look at:

Let’s consider two regular individuals interesting retirement planning for the sake of retirement returns.

The difference between these retirement pension plans is below:

• Start Early, retire anytime: No matter what age you are planning on retiring, it’s important that you begin early with your retirement plan. The benefits include a greater maturity amount and small investment. Don’t start too late, as the amount you are likely to invest at a later stage will be greater and the maturity returns much lesser.
• Time your savings: As mentioned earlier, starting early is definitely helpful, yet it’s important to estimate the amount you are likely to dedicate at the end of each month. By this we mean, that the amount you are investing regularly at the end of each month can help you determine your savings.Again, the earlier you begin your savings for investing in the scheme, the lesser amount you will have to dedicate towards the plan.
• Time lost is money lost: As we see in the example presented earlier, Shyam stood to lose out more in comparison to his friend Vinod. Although, the amount invested was greater, the period of investment made all the difference. When it comes to investing in insurance schemes, the longer the duration, the better the maturity returns. Shyam stands to lose an amount of Rs. 888483/- (Rs.Rs.1, 897,635/- minus Rs.1, 009,152/-).

Apart from these factors, investments in various other factions can get you good returns such as PPFs, NSS etc. Don’t hesitate to evaluate the pros and cons of each of the schemes slated for retirement. Planning for retirement necessarily does not include the welfare of you alone, but it also includes the welfare of your near and dear ones.

About HDFC Life

HDFC Life , one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.