Retirement Planning

Retirement Planning: Why You should Start Early?

Once upon a time, I asked my friend who is 28 years old that, “How do you plan for Retirement?”

He started laughing & told me that, Dude, I am just 28 years old today and there is a long way to retire. Why to think today about Retirement?

Well, This is the common mindset of young people. They think that Retirement Planning is something that should be think when you are near your retirement. Many people think that, Old people think about Retirement Planning.

But Let me tell you honestly that, Retirement Planning is for young people. It is better that you start your retirement planning as early as possible in your life means NOW….!!!!!!

Ideally, the day you start earning, you should start thinking about your Retirement Planning.

Yes, It is that much important and that’s why I have highlighted the above statement. It is very important that you start savings & Investing for your Retirement from the day you start earning.

Why to Start Early?

Well, because to make Compound Interest work in favour of you. Let me give you a Simple Example here.

$ – The Power of Compound Interest & Why to Start Early? -

“Let's take an example to understand it better. Say X is 28 years and wants to retire at 60. S/he has 32 years to go. If s/he starts investing Rs 1,500 per month for the next 30 years, then at the rate of 15 per cent (assuming s/he is doing a systematic investment plan in equity mutual funds) s/he will have a corpus of Rs 1.03 crore.

Where as if you don't start at an early and at 50 you decide to start investing then to have a corpus of Rs one crore you will require an investment of Rs 41,500 per month!

While this may not be possible starting your retirement planning when young is. It is not necessary to start with a bang. You can start with small amounts and increase it as your salary increases. Also, if you start early and you have time with you, you can gain advantage of high returns and maximise your investments by investing in equities or equity mutual funds”

So according to above Example, it is better to start savings & Investing small amounts early rather than earning & saving lots of money in the later life…….!!!!!!!!

So That’s why start planning your Retirement Early. In the next few Articles, I will teach you that How to design a perfect Retirement Plan?….