Back to Blog
Many people tend to overlook retirement planning in the overall financial plan that they make for themselves, until it’s too late. The truth is that the earlier you start planning for retirement, the better off you’ll be in the long run. One of the most popular investment vehicles for retirement planning is, of course, the government-run National Pension System.
The NPS pension scheme that allows individuals to invest and save for their retirement years. It’s open to all citizens of India between the ages of 18 and 60. Contributions can be made on a regular basis (such as monthly or annually) up until the age of 60.
In this blog, we’ll walk you through the steps of how to include retirement planning in your financial plan, and secure your life after you retire from work, by letting your money work for you!
Determine Your Retirement Goals
There is no retirement planning without determining your retirement goals. For that, you need to ask yourselves some pretty pointed questions!
- How much money do you want to have saved up by the time you retire?
- What kind of lifestyle do you want to live during retirement?
- Do you plan on travelling or buying a second home?
- Once you have the answers to these questions, you can start working towards them.
Calculate Your Retirement Needs
After you have determined your retirement goals, you need to do some serious calculations about how much money you will need to save to achieve those goals
Remember to factor these in when you crunch the number:
- Current age
- Retirement age
- Life expectancy
- Expected retirement expenses.
You can also use online retirement calculators or take a financial advisor’s help to calculate your retirement needs.
Determine Your Retirement Income Sources
Next, you need to figure out where the money that will secure your retirement will come from. This is where the National Pension System, and other long-term investment vehicles will come into play. It’s essential to know how much income you will have during retirement, so you can plan accordingly and ensure that you have enough money to cover your expenses to live a comfortable life, free of financial stress.
Keep Reviewing Your Plan Every Year
We can’t stress enough how important it is to review and adjust your retirement plan regularly. People change, you will change with them, and your life and retirement goals might also change as you grow older. So you need to make sure that your retirement plan is flexible enough to adapt to those changes. We recommend that you review your retirement plan once a year, at least, and make changes to it accordingly.
Ready?
Get started with opening a NPS account or you want to learn more about it, you can visit here.
