Retirement Tips: Know 4 important things before doing retirement planning..


Whether the job is private or government, retirement happens in both at a certain time. After retirement, your savings (Retirement Planning) are your strength. Therefore, it is important that as long as you have a job, you accumulate so much money that in old age, when your body is no longer able to work hard, you can continue to fulfill all your needs with your savings. You should have so much money that you never need to get financial help from anyone. For this, it is very important to do retirement planning on time. If you are also employed, then know here those 4 important things that you must remember while planning retirement.


In how many years will the value of the deposited capital be halved?
Today when we talk about Rs 1 crore, it seems like a huge amount, but after a few years from now, its value will not be much. Keeping this in mind, you will have to add so much money which will have a good value at the time of your retirement age and accordingly, you will have to decide your savings and investment strategy. Now the question is, how will you know how much will be the value of your deposited capital in how much time? Rule 70 will help you with this. This tells in how much time the value of your deposited capital will be halved. For this, you should know about the current inflation rate. When you divide the current inflation rate by 70, the number that comes out will tell you in how many years the value of your total accumulated capital will reduce to half.

Understand with example- Suppose that at present the inflation rate is 6 percent. In such a situation, apply the formula and divide 70 by 6. 70/6 = 11.66 i.e. the value of your savings will be halved in about eleven and a half years. Meaning, if today you need one crore rupees to live a good life, then after about eleven and a half years from now you will need two crore rupees to live a good life because then the value of one crore rupees will be equal to Rs 50 lakh.
Understand the power of compounding
Once you have an idea of how much money you have to add by the time of retirement, then you will have to save that amount as savings and invest it. Invest in those places where you get the benefit of compounding interest. Compounding has the ability to convert investments into wealth. In this, you get interest on the investment amount along with its interest. The longer you invest, the more you can benefit from compounding. In such a situation, as soon as you start a job, invest as much as possible in schemes that provide compounding benefits like PPF, NPS, SIP, etc. Apart from this, employed people can also increase their investment in EPF through VPF, and through this they can add a good retirement fund. If you are the father of a daughter, you can choose a scheme like Sukanya Samriddhi for her future needs.

Keep variety in your portfolio
It is said that one should not keep all the eggs in one basket. The same rule applies in the case of investment also. Therefore, never invest all your savings in a single scheme. Divide that money and invest it in different schemes. This is a safe and smart method. Keep this thing in mind carefully.

Remember the 20 percent savings rule
You should develop the habit of savings as soon as you earn your first income. For this, keep the 20 percent rule in mind. The financial rule says that every person should save 20 percent of his income and invest it. In such a situation, if your salary is Rs 40,000, then you should invest Rs 8,000 out of it in any case. As the salary increases, your share of 20 percent will also increase. If you invest following this rule, you can add a good amount of money in the coming 25 to 30 years.

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