20 years ago, the average lifespan of India’s population was 53 years. But did you know that with medical advancement and a more healthy approach, this has surged to 71 years by 2017! This means that you will have more years where you won’t be working, but will still need money to cover for all planned and unplanned expenses.
This calls for astute retirement planning so that you have money when you need it the most i.e. during the retirement years. Here are some golden rules of the best retirement investment strategies that will help you in accumulating a better retirement corpus to help you tide over your sunset years with dignity.
1. Start early
Ideally, retirement planning should begin from late 20s. It is rare to see 20-somethings enquire with financial consultants about retirement planning. However, if you need to meet the demands of a retired life then you need to start planning early so that your retirement corpus is decent. Remember that you could end up with 15-20 years without a definite income, so your corpus needs to cover for the large period of life.
2.Plan for contingencies
Emergencies always come unannounced. With age, most people stop going to work and getting a regular source of income. In many cases, they largely depend on passive income that comes through bank FDs, rents and other sporadic sources. You need to have six months of expenses kept aside as a contingency fund. So start building this fund from an early age to help you tide over your later years with ease. Make sure to park funds in liquid funds as they can be liquidated easily and offer better returns than bank savings account. Make sure to increase your contribution to this contingency fund to factor in rising inflation (which typically rises @ 8% p.a.).
3.Plan for inflation
Inflation is the biggest culprit that will eat away the value of your savings. So, you would be able to buy a lesser number of products or goods with a given amount of money as time goes by. Your retirement investments need to account for this influential factor. Also, inflation will continue even in your retirement years. Think about that!
4.Plan for healthcare expenditure
Most of us commit the mistake of underestimating the immense pressure of expenditures arising out of medicine and healthcare costs to treat an illness or age-related condition. And it’s not just your own health, but the family’s health in general that you will need to account for.
5. Go for the stable returns from Bonds & Debentures
Bonds are considered one of the popular options for retirement planning. Having these in your retirement portfolio is critical due to the stability of returns and absence of fluctuations that are a given in any other investment, be it mutual funds, stocks or shares. Browse through GoldenPi’s collection of bonds and debentures to find the right match to fulfil your retirement needs.
