Retirement Planning Series - Conclusion

We have come to the end of the Retirement planning series. So far, we have covered the following:

1. Why plan for Retirement? and
2. How much money will I need?
3. Where will the money come from?
4. Building the Retirement Corpus


While it's impossible to learn everything you'll ever need to know about retirement planning in a single article, the topics we have covered in this series should give you a solid start.

Retirement planning is an ongoing, lifelong process that takes decades of commitment in order to receive the final payoff. The idea of accumulating hundreds of thousands of rupees in a retirement corpus can definitely seem intimidating, but as explained in my articles, with a few basic calculations and commitment it's not difficult to achieve.

Let's revise what we have covered so far:

• Every individual is responsible for planning for his/her retirement
• How much money you'll need to save for retirement will depend on your desired standard of living, your expenses and your target retirement age.
• To determine the size of the retirement corpus, you'll need to:

o Decide the age at which you want to retire.
o Decide the annual income you'll need for your retirement years.
o Add up the current market value of all your savings and investments.
o Determine a realistic real rate of return for your investments.
o Obtain an estimate of the value of your company pension plan.

• Assume that an annual inflation rate will erode the value of your investments and adjust your savings plan accordingly to provide yourself with a margin of safety.
• Income during retirement may come from the following sources:

o Employment income,
o Employer-sponsored retirement plans,
o Savings and investments,
o Other sources of funds, including inheritance money, prizes and lottery winnings, gifts, raises, bonuses and real estate.

• There are several investment options that can be used to achieve your retirement savings goals. These include, but are not limited to

o Bank Deposits
o Stock Market Investments
o Gold
o NSC, PPF etc

• Beginning to save for retirement at an early age is one of the biggest factors in ensuring success.
• Asset allocation is a key factor in building any successful portfolio. The assets you choose will depend on your risk tolerance and investment time horizon.
• Diversification will help you to reduce the amount of risk in your portfolio, increasing the chances that you'll reach your retirement savings goals.
• Make a household budget to ensure that you are contributing as much as possible to saving for retirement and aim to reduce unnecessary expenses

Other Considerations:

1. Remember that most investment options have tax implications
2. Make sure to factor in the amount of tax you may have to pay on the income earned through your investments (don't worry, you can find out the tax implications of the investment options in my blog in the various articles and if you cant, just leave a comment and I will get back to you)
3. Make sure to revisit your retirement plans at the end of every 2-3 years and make adjustments if required
4. Make sure you re-jig your portfolio at the end of every decade. As you progress in age, your risk capability comes down and moving from an aggressive portfolio to a conservative portfolio is a must for any individual who wants to preserve his capital around retirement age


I hope this retirement planning series was useful to you. Do leave a comment if you have any queries and I will try to answer them.

Happy Retirement Planning!!!