14/11/2023
GROW YOUR SAVING FOR FUTURE
Financial independence is the most important retirement goal. With retired lives getting longer and costlier (particularly healthcare), you should start planning for retirement early in your working careers, if you want a stress free and comfortable retired life. An important factor to consider in retirement planning is lifestyle. Though lifestyle choices are income dependent, they are habit forming and difficult to give up even when you do not have income. Therefore, ability to sustain pre-retirement lifestyle in post-retirement years should be an important retirement goal.
How should you go about retirement planning when you are young?
If you are young (in your twenties or early thirties), you do not know what your lifestyle will be in your fifties and the retirement corpus you need. Nevertheless, you should start saving for retirement when you are young because there will be multiple goals (like buying a house, children’s education, marriage etc.) competing for savings. Personal finance thumb rule suggests that, you should save at least 10% of your income for retirement.
Just like you work hard to earn money, you should make your money work hard too by investing your savings. There is a saying in Wall Street that, money never sleeps. By investing your savings you will make profits, the profits re-invested will get you even more profits. This will go on and on till you remain invested; in finance parlance, this is known as compounding. If you start young, your investments can compound over longer period of time. By the time you retire, you will realize that, the investments made in your twenties and thirties grew much more than the investments made in your forties and fifties, even though you may have actually invested more in the later years of your working life; this is the magic of compounding.
Please start your SIP [Systematic Investment plan] without wasting any time by saving some amount every month and secured your future.
