How Much Should You Save for Retirement?

We get it; thinking about yourself in the future can be a difficult and even abstract concept. Many of us would rather think about ways to enjoy our hard-earned money today or, better yet, how we will use that money to pay for the biggest moments in our family’s lives – like college or weddings. Studies within the last decade even demonstrate that the lack of connection we have with our future selves leads to us allocating less of our money to retirement.

The main problem with this is that now, as the average life expectancy for Indians climbs towards 70 years old according to data from the World Bank, the retirement age in India remains at 60 years old for public workers and up to 65 years of age for private employees. This means that people have to live off of the money they saved during their earning years for a significantly longer period of time. Retirement plans India offers in the market need to be able to cover 15 or more years of your life after retirement and enable you to maintain the same standard of living you enjoyed during your earning years.

Whether your future involves traveling the world or pursuing hobbies like landscape painting, the reality is that saving early and at a regular frequency for retirement is the best way to have enough for your golden years without relying on adult children or other relatives. This does not mean that if you are closer to retirement than you are to the beginning to your career that your opportunity to save has passed. Retirement savings plans are available to protect people at any stage of life, and regardless of the amount of risk you can reasonably take on with your investment.

A retirement planning calculator can be a helpful tool to give you a general idea of how much needs to be saved annually to reach your financial goal. However, these tools can vary and ultimately prove to be an inaccurate method of creating a personalized retirement plan. At its most basic, thinking long and hard about your retirement goals and spending habits as well as how much time you have to achieve it is most important. Additional considerations, such as inflation and tax exposure, will also need to be taken into account to ensure that you select retirement planning options that allow you to reach your goal.

If you are seeking options beyond the National Pension System (NPS), Public Provident Fund (PPF), or Senior Citizens’ Saving Scheme (SCSS), the Indian market has a variety of options for investing in financial assets, compared to non-financial assets like real estate, gold and other commodities. Savings accounts are generally low risk and also help you prepare for retirement but deliver low interest rates. Money market accounts can offer a higher financial yield than traditional savings accounts, but you need to make a larger initial contribution making it out of reach for some people. Those with a higher appetite for risk may opt to invest in the stock market or mutual funds.

Retirement insurance plans like the solutions offered by PNB MetLife can provide the additional security you desire with guaranteed income, up to the age of 100 in some instances, and help you create a comfortable future for the next generation. Riders for accidental death or serious illnesses can be added to certain retirement plans as well as options to safeguard your family with no future premiums in the event of your absence. Premium payments terms can be modeled to suit your current needs, while still covering your whole life. Additionally, if you are alive when the plan reaches maturity, you may be eligible for benefits in addition to getting the sum you contributed returned.

Although you may feel more inclined to plan for other milestones like your children’s education or wedding, planning for your golden years should be just as high on your list of priorities. Ultimately, the worst retirement plan is the one that never gets off the ground. Talk to a financial advisor about the right mix of high and low risk investments and savings vehicles for your current budget and future goals.

Doesn’t the thought of retirement sound blissful? No work, no deadlines, and all your hours spent doing the things you love, like travel, painting, and even napping in the afternoon! If you want your retirement to be what you have always dreamed of, start retirement planning now and save a considerable retirement corpus in time. The online Retirement Calculator can help you plan your future financial goals and ensure you achieve them within the stipulated time.