Gone are the days when the Govt used to take care of one’s retirement (Pension - Defined Benefits Plan), the onus has now shifted to individuals to build their retirement nest.
Armed with a pension from the employer, several of us have seen our parents switching smoothly to a comfortable retirement. For many others in India, there has been the retirement cushion of family support.
However, all of that is changing – but
The sad part is, many of us are not prepared for that change. Retirement seems to be something distant, it is all too comfortable to live in denial.
The reality is that our salary levels are increasing. We are earning far more in a couple of years, than what our parents earned in their lifetimes. We are ambitious and want to express ourselves, we take sabbatical breaks, and retire early from our mainstream jobs and pursue avocations that we always longed to take up.
So what is the solution?
Start thinking about it NOW. You might be a 24 year old who just started working, or a 40 year old who has been employed for a while. Delay in investment planning has a severe cost - as clearly illustrated in the eg below:
| Goal |
Start now |
Delay by 5 yrs |
Start early by 5 yrs |
| Retirement |
14,307 |
26,613 |
7,775 |
Assumption: A 30 yrs old looking to build a corpus of Rs 5 crores to retire at the age of 60 yrs. Numbers represent monthly investment required to achieve this goal. Rate of return on investment taken is 12%.
Moral of the story: Start your investment planning early enough. Otherwise, you will have to run faster as you will have little time to catch up.
Talk to your Fin@Work advisor and get an assessment for yourself. You would not want to be caught on the wrong side of the equation, 5 years down the line.
