There is no right age to start planning for retirement planning, the earlier the better. You have to be wise and prudent in choosing the right Pension plan that meets your financial requirement after retirement. This comes with research and experience alone. Be your own fund manager for your pension portfolio.
How much do you need for retirement?
Based on your age, the vesting period may vary, so you must calculate the sum that you will need during your retirement age and start working backward from there. You should take into consideration the Inflation rate so as to come up with the right amount of premiums.
Once you know the premiums that you need to invest each month or year, plan your investments on SIPs and other investment plans where you are bound to save.
Be prompt and do not postpone the investment amount of each Term for a later date. And the most important aspect of a pension plan is the discipline to be maintained during the investment period.
Diversify your funds on different investment options. It is best to invest in long term funds and should not worry about the short term volatility of the market conditions.
Do not put all your eggs in the same basket. Since this is a long term investment, park percentages of your money in different options on equity and debt.
This way even if the market is volatile in the short term, in the long term it will gain. And by diversifying the funds, you are reducing your Risk of losing all your money. Be wise when you are saving for your retirement.
Stay away from the products that have high commissions and other hidden charges. When you are dealing with agents who are selling their products, ask explicit questions about the charges.
Agents tend to only highlight the possible returns of 15% or more and very conveniently hide the charges. You should come up with the possible rate of return of a product by accounting for these charges as well.
Remember, it is a pension plan so why pay someone else the extra money when you can save that amount as well for the future.
Take Check Points
Watch out for your fund’s performance over the years. And also take inflation into consideration over time. By the time, our income also increases and so does our expenses.
Maybe you have extra income now which needs to be saved for later in life when we need it most. So, try to increase your premiums and savings as time goes as you never know what will come up as a major expense during the time that you need it the most.
It is very easy to neglect the savings for your retirement and spend the excess money on your dream vacation or any other unwanted expenditure.
Remember that retirement is when you will have the time to relax and enjoy your life to the fullest. As much as the vacations and other expenses are important in the present, so is the need to save for your retirement. Start early so you can have a blissful retired life.