With growing needs and increasing cost of living, people now-a-days are busy trying to climb the corporate ladder to earn a fatter pay-cheque. Every individual wants to earn a higher income than what he / she earned the previous year; so as to meet their family’s financial goals such as children’s education and / or marriage, buying a house and so on. Almost everybody is struggling and working hard to provide the best to their families. And while slogging out to achieve all such financial goals, there are some individuals who also wish to retire early and live their life in bliss after fulfilling their family responsibilities. But it is noteworthy that how early you retire or how will your post retirement life be, depends upon the approach that you adopt today. You see, even if you are not planning to retire early it is imperative to recognise that planning is paramount, especially if you are the sole bread earner of the family; because much depends on your income for your family to live a comfortable life once you are retired.

Hence for your benefit, we have listed down certain steps that can help you plan for an early and peaceful retirement.
 

• Determine the retirement corpus
  
  Unless you know where you are headed, it is very difficult to get there. In retirement planning as well, it is important to have a target in mind to live comfortably in your golden years. To arrive at this corpus, you might need to make certain estimations and assumptions. You have to work out – how early do you wish to retire, what is your life expectancy (based on family history and health conditions), how much will you spend every month, inflation that you expect on these expenses, pre and post retirement rate of return that you expect on investments, etc. Thereafter you can compute the corpus amount required for your retirement by taking the help of online retirement calculators. It is imperative that you set realistic expectations based on your current financial status and financial goals.
   
• Start saving regularly
  
  If you wish to retire early, it is extremely important that you save a fixed amount (as calculated) each month without fail. If your family expenditure leaves you with very little to save, it is high time you reduced unnecessary expenses and started working towards saving the requisite figure each month. It may also be wise to spend sensibly on necessities such as food, electricity, clothing and so on. If you prefer going for family dinners often then reduce these outings. Plan your shopping trips beforehand so that you can save on fuel costs and use coupons and discount offers to purchase required items. You or your spouse may also consider finding an additional source of income if you are yet unable to meet the target amount.
   
• Invest wisely
  
  Saving alone may never be able to help you to meet the desired retirement corpus as the inflation bug eats into your hard earned money every single day. Hence it is important to invest your savings in different asset classes (equity, debt, gold etc.) depending upon your risk appetite and time horizon. Different asset classes have different attributes, which help in maintaining the required balance in one’s retirement portfolio. While equity as an asset class has the ability to beat inflation and provide alpha returns over a longer time horizon, debt instruments usually provide stability to one’s portfolio and generate a regular income stream. Following a suitable asset allocation pattern will help your portfolio to grow at an attractive rate of return and also safe guard it from market volatility when your retirement age comes closer. However, you must remember that merely following a suitable asset allocation pattern alone will not help you reach your goals unless you invest in sound and appropriate investment avenues.
   
• Insure yourself adequately
  
  Insurance is inevitable in case of retirement planning. As an individual grows older, the number of physical ailments and emergencies also increase. Hence it is extremely important for you to have a suitable and adequate health insurance policy or mediclaim. Apart from this, it is also wise to opt for a personal accident and critical illness policy from an early age. It is advisable to maintain a medical contingency fund worth Rs 5 – 10 lakh (depending upon how much you can afford) and a general contingency reserve with 6 to 12 months of your expenses to compensate for unforeseen events. This will ensure that your retirement savings do not get eroded in case something unfortunate is to happen to you or your family.
  
  Moreover, everyone’s life is unpredictable and uncertain. While you might believe that something will not ‘happen to you’, God forbid but destiny may have a nasty surprise in the offing. Therefore, it is also important to insure your life with a term plan having an optimal cover which can take care of the family expenses in case the bread earner meets with an untimely death.
   

While you may think that you are too young to be thinking about retirement, let us apprise you that it’s never too early to start planning for it, as long as you have started making a living. In fact, if you want to retire early it goes without saying that you must begin the retirement planning process as soon as possible.

PersonalFN is of the view that planning for retirement is not just a one-time time process. Your retirement plan needs to be regularly reviewed and monitored so that you never go off-track while striving to meet this important financial goal. Since many of you might not have the expertise or the time to make or monitor such a plan, you must not hesitate to seek the advice of an experienced financial planner who can guide you in this endeavour. On that note, we wish you an early and rich retirement!

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