Retirement planning, often overlooked, is as crucial as any other aspect of financial well-being. “With increased life expectancy due to improved medical facilities, dwindling pension systems, and rising living costs, securing a stable post-retirement life has become more challenging without a regular income” said Gaurab Parija, Head – Sales & Marketing, Bandhan AMC.
“A high-yield retirement plan is no longer a luxury but a necessity. It allows individuals to maintain their living standards without relying on others. Effective retirement planning involves understanding the investment landscape, including the balance between equity and debt. Retirement investment requires a thorough understanding of asset classes. Equity investments, though volatile, can offer substantial returns over time. In contrast, debt investments provide reliable cash flows with lower risk but limited growth potential. A balanced strategy involves diversifying the portfolio with a mix of asset classes to achieve desired growth while mitigating risks” explained Parija.
“Time is a critical factor in ensuring a smooth retirement. The earlier you start, the better your future. Early planning leverages the power of compounding, turning small investments into significant returns over time. This approach allows for incremental increases in investments as income grows, without straining your finances.
Starting early also enables better risk management through diversified investments and timely course corrections. It's about making conscious choices, beginning with what you can afford, and gradually increasing your investment size as your income rises” Parija added.
The first step in retirement planning is defining your post-retirement life goals. Determine the lifestyle you desire, and the funds required to sustain it. An in-depth evaluation of your current financial state is essential to establish how much you can allocate for retirement. Research various investment instruments that offer compound interest and align with your long-term retirement objectives. Inflation erodes the purchasing power of money over time.
