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Why should retirement planning be a priority for every Indian?

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The fact that Indians shy away from discussing retirement plans has a lot to do with our lack of financial literacy. Most of us have spent many precious minutes fantasizing about the day when we can retire and won’t have to go to work. We dream about a happy retirement, imagining ourselves taking a break from all responsibilities. However, only a few of us will be able to live this ideal retirement life when the time eventually comes to do so.

After a certain age, we’re all faced with the responsibility of looking after our aging parents but we fail to remember that the same fate awaits our children too when we meet our retirement age, unless we ensure adequate retirement planning ahead of time. For example, a stable retirement fund ensures that we’re never financially vulnerable and can afford any care we require.

To be clear, experts believe there are three important reasons why retirement planning should be a priority.

  1. You can’t work forever. Many of us want to work post-retirement too. But will the meagre income be sustainable? Hence, retirement planning is essential to be financially independent after you stop working.
  2. The future is uncertain, and you might have to make an unplanned large investment. But will it be possible to execute this if you can’t work? Good savings and the right investment can help you through unprecedented times and challenges.
  3. Health problems are unavoidable as time passes by. Medical expenses are bound to make a dent in your savings and leave you stranded financially post-recovery.

India, like several other developed countries, lacks a social security system to care for the aged. There is neither free medical care nor a monthly government pay-out on which pensioners can rely. Even government employees who formerly had the security of a guaranteed pension must now build a corpus because the government has eliminated this benefit for most of its employees.

So why are we not prioritizing retirement plans? How long can we postpone an ever-looming necessity? Beyond the age of 50, one barely has the time and money to plan a joyful retirement. If this rings a bell for you, here are some of the best tips from industry experts to plan your retirement.

  1. Create alternate sources of income.
  2. Keep increasing the contribution to your retirement savings every year.
  3. Do not rely solely on security schemes.
  4. Keep risk factors in mind before investing a considerable sum of money.
  5. Consider inflation. Rs. 10 lakhs today will not have the same monetary value 20 years later.
  6. Stay away from excessive expenditure.

In an environment of rising inflation and market volatility, it’s essential to have a retirement fund large enough to last you your lifetime. Otherwise, you risk being compelled to work during your retirement, a situation that no one wants to be in.

Sure, you can take a chance and trust that your children will take care of you, but that is a significant leap of faith to make. And even if they are prepared to do so, would you want to burden your offspring with the obligation of providing for your financial well-being in your old age?

Maloo Investwise cuts out the confusion over what modes of investment to use for the highest returns on your retirement fund and provides you with a comprehensive financial plan that stands true to the test of time. So with whatever little you have, start today!

Views are personal: The author, Dr. Ramesh Chand Maloo of MALOO INVESTWISE PRIVATE LIMITED is a Mutual Fund Distributor from Jaipur

Disclaimer: The views expressed are of the author and are personal. TAML may or may not subscribe to the same. The views expressed in this article / video are in no way trying to predict the markets or to time them. The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any manner for the consequences of such action taken by you.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.