Aging, although a global phenomenon, is all set to emerge as a major social challenge in India. According to the latest official figures, jumping 35.5 per cent from 7.6 crore in 2001 to 10.3 crore in 2011, the population of Indians over the age of 60 constitutes 8.6 per cent of the country’s total population, an all-time high since independence, where the figure is believed to only increase.
Loss of finance and health problems are the two major problems people face in old age, more precisely, after retirement. Saving money for retirement is crucial to meet your monetary needs. A retirement planning calculator helps you predict how much you need to save for your retirement to survive in India. There are various retirement calculators available online that can help you determine your post retirement needs.
5 Things to Do for Effective Retirement Planning
- Start at an Early Age
If you are trying to know when you should start retirement planning, the answer is NOW. The idea behind saving as early as you can is to make the most of the power of compound interest. The longer you save for retirement, the more you will accumulate and the more comfortable your retirement years will be.
- Keep Inflation in Mind
The biggest mistake people make in determining their retirement needs is that they forget to include the impact of inflation, which can prove to be a vital factor in the scheme of things. Another mistake you can commit is to think that after retirement, you might spend less, which is so not true. The truth is, after retirement you’ll be free to do the things that you have been craving for all these years, including traveling, shopping for particular things, which would need money. Don’t forget, health problems also begin to emerge as you age, so you need to plan for the high cost of medical treatment as well.
- Use a Retirement Planning Calculator
A retirement calculator is an online tool, which takes into account your age, number of dependents, your current spending habits, etc., to help you estimate the corpus you need to build to address your retirement needs in India. This tool can help you determine if you are on track to accumulating enough money to meet your future expenses and to live the life you always wanted for yourself post-retirement.
- Stay Diversified
Most people commit the mistake of investing all their money in a single market fund, where all the profit and loss depends on how the market performs. On the other hand, when you diversify your investments across different types funds and instruments, you can make profit from one fund even when another is not performing well. This way you can smoothly sail through the highs and lows of the market and pull the money out when required.
- Opt for Minimum Fees
You can opt either for actively managed funds or passive funds that are related to the stock market. However, in both cases, you need to check the fees that you will have to pay. When you opt for minimum fees, it can increase your profit to lakhs in a few decades.
Look for the best online retirement calculator that can tell you accurately the amount you need to set aside to live an independent and happy life post retirement.