HEAD START—Importance of Retirement Planning

In your youth, retirement may seem a distant thing to worry about. Yet, if you want to lead a  comfortable and dignified retired life, financial planning is necessary. No matter what your  ideal retirement looks like, be it a relaxed time at home with family and loved ones, or one of  adventure and travel, it will need money.

What is retirement planning 

Retirement planning means preparing for a steady stream of money after retirement. It entails  setting aside funds and investing specifically with that goal in mind. Your retirement strategy  will depend on your final goal, income, and your age. 

Why do you need retirement planning 

Growing old can be expensive. Although unimportant expenses might reduce, medical bills are  only likely to rise. Add to that the burden of inflation, and not having enough money to sustain  future expenses can cause stress and worry. The purpose of having a retirement investment  plan is to ensure financial stability in your later years without depending on others. 

Top reasons to have a retirement plan Lack of a social retirement benefit 

India has yet to implement a robust social security system with retirement benefits for its senior  citizens. Although pensions and employee provident funds do exist, they may not be sufficient  to cover all expenses. This is why creating a diversified retirement fund with fixed income and  mutual fund investments becomes crucial.

Financial independence 

For generations, older Indians have depended on their children for retirement support. Lately,  youngsters are leading more independent lives. Often, they are unable to support their parents  financially. Even if they can do it, being responsible for yourself will give you more  independence to live life on your own terms because you will not be answerable to anyone else. 

Rising costs 

As an investor, you will need to account for rising costs. Inflation is a vital element to consider  when planning your retirement. If you are unable to keep up with rising costs, you may have  to compromise on your standard of living.

Medical emergencies 

Healthcare costs are pivotal to understanding the importance of retirement planning. While  retail expenses continue to rise steadily, healthcare inflation is growing at an alarming rate. While  other financial goals may be negotiable, health cannot be compromised.  

Planning for retirement must be a non-negotiable part of everyone’s financial strategy. The  future may be uncertain, but it can help to be prepared. Diversify your retirement corpus by  investing in mutual funds, fixed-income securities, and other government-backed securities.  Start as soon as you can so that your later years are relaxed.

important links-

    1. https://www.investopedia.com/articles/retirement/11/5-steps-to-retirement-plan.asp
    2. https://economictimes.indiatimes.com/wealth/plan/the-30303010-rule-of-saving-for-ones-retirement/articleshow/85709986.cms
Idobro Impact Solutions has partnered with Tata Capital to make Financial Literacy accessible for all. For more information on the initiative and to get a deeper knowledge on financial terminology, visit: www.dhangyan.com

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