Planning for Retirement: Are You on Track?

Retirement might seem like a distant milestone, kind of like that fitness goal we all keep pushing to ‘next Monday.’ But here’s the thing; the earlier you start planning the better, your future self will thank you. Think of it like planting a tree. The best time was 20 years ago, but the second-best time? Right now!

So, are you on track? Let’s find out.

Before diving into numbers, let’s get personal. What’s your vision of retirement?

- Chilling in a cosy beach house with unlimited chai?
- Traveling the world like a digital nomad (but without the digital part)?
- Spending time with grandkids and making up wacky bedtime stories?

Your dream lifestyle determines how much you need to save. A minimalist life in a quiet town will cost less than a jet-setting retirement. So, define your goals first!

Q: How do I calculate how much I need for retirement? A: A simple rule is the 4% rule, calculate your annual expenses and multiply by 25. That’s your target retirement fund!

It’s great if you’re saving but how you save matters just as much. Here are some hacks you might not have thought of:

• The 1% Rule: Every time your income increases, bump up your savings by at least 1%. It’s small, but it adds up over time.
• Automate Savings: Set up auto-debits to your retirement fund, so you never “forget” (or get tempted to spend it on impulse buys).
• Treat Bonuses Like They Don’t Exist: Whenever you get a bonus, invest at least 50% instead of splurging on a new gadget.

Q: Is saving 10% of my income enough for retirement? A: It depends on when you start! If you start in your 20s, 10-15% might be enough. If you start later, you may need to save 20-30%.

Your expenses in retirement aren’t just about food, shelter, and vacations. Here are a few sneaky ones to plan for:

• Healthcare: Medical costs skyrocket as we age. Consider a solid health insurance plan now instead of later.
• Home Repairs: That leaky roof? The creaky stairs? Future-you will appreciate the foresight to set aside a maintenance fund.
• Inflation-Proofing: Today, a cup of coffee might be ₹50, but in 20 years? You don’t want to be the one complaining about how cheap things used to be!

Q: How do I account for inflation in my retirement plan? A: Assume an inflation rate of 6-7% annually and factor it into your calculations when estimating future expenses.

If your retirement savings are sitting in a fixed deposit alone, we need to talk. You need your money to grow. Here’s where you can be creative:

• Fractional Real Estate: Invest in properties with friends or through platforms that allow fractional ownership.
• Dividend Stocks: Build a portfolio that pays you while you sleep.
• Gold (Digital or Physical): Because when in doubt, gold has always been a safe bet.

Q: Should I invest aggressively or conservatively for retirement? A: When young, invest aggressively in equities for higher growth. As retirement nears, shift to safer options like bonds and gold.

Retirement and debt don’t mix well. Imagine finally retiring only to have EMIs chasing you down? Not fun.

• Tackle high-interest debt first: Credit cards and personal loans should be out of the picture ASAP.
• Go for early loan closure: If possible, try to close off home loans early to free up future cash flow.

Q: Should I prioritize debt repayment or retirement savings? A: Balance both! Pay off high-interest debt first, but don’t neglect retirement contributions entirely.

Why retire from earning? If you love what you do, why stop completely?

• Passive Income: Rental properties, dividend stocks, and even writing a book (or an online course!) can keep money flowing in.
• Consulting or Freelancing: If you’ve got years of experience, companies will pay for your wisdom even if it’s just a few hours a week.
• Turn Hobbies into Cash: Always wanted to start that Etsy store? Retirement is the perfect time!

Q: Can I still work after retirement? A: Absolutely! Many retirees take up part-time consulting, freelancing, or turn hobbies into income streams.

Here’s something no one talks about: test-driving your retirement lifestyle before actually retiring! Try living off your estimated retirement budget for a few months.

• Does it feel comfortable?
• Are you underestimating any expenses?
• Do you feel financially secure?

It’s like a reality check before the real deal!

Q: How do I know if I’m saving enough for retirement? A: Use a retirement calculator to estimate your required savings. If there’s a gap, increase contributions or diversify investments.

Retirement planning doesn’t have to be overwhelming. Think of it like a puzzle you just need to put the pieces in place.

So, are you on track? If not, no worries. The best time to start is now. Future-you is counting on it!

Ria Jadav

Marketing Strategist | FIKAA