Without a proper retirement plan, people may not be able to afford the same lifestyle that they are used to during their working years.
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Retirement planning is crucial in India to ensure financial security and a comfortable lifestyle during old age. It is essential to start planning early to accumulate enough funds to sustain oneself during retirement.
With advances in healthcare and medical technology, people are living longer. Therefore, they need to plan for their retirement to ensure that they have enough funds to sustain their lifestyle and meet their healthcare needs during their retirement years.
The cost of living is also increasing rapidly. Therefore, experts feel it is important to have a retirement plan that takes into account the impact of inflation on the cost of living.
Without a proper retirement plan, people may not be able to afford the same lifestyle that they are used to during their working years.
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Ajay Lakhotia, founder and CEO, Stockgro, said that understanding the importance of balancing short-term goals with long-term planning is very important.
Why is early start of investment important in retirement planning?
Early start of investment is crucial in retirement planning because it allows you to take advantage of the power of compounding.
Compounding is the ability of an investment to generate earnings not only on the initial amount invested but also on the accumulated interest or earnings over time.
The earlier you start investing, the more time your money has to grow through compounding. By investing early, you give your money more time to work for you, and your investments have more time to recover from any market downturns.
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The earlier you start investing, the more time you have to save and grow your retirement savings, and the more money you will have available when you retire. It is always recommended to start investing as early as possible to achieve a comfortable retirement.
Here are five steps suggested by Lakhotia to help you ensure a secure and fulfilling retirement;
1. Discover your destination: Figure out how much money you’ll need to live the life you want in retirement.
2. Early bird catches the worm: The earlier you start investing, the more time your money has to grow. Make it a habit to squirrel away a portion of your income each month.
3. Diversify or die: Don’t put all your eggs in one basket. Spread your investments across multiple asset classes to reduce risk and maximize growth.
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4. Hands off the cookie jar: Retirement accounts are meant for your golden years, not for your midnight snacks. Avoid withdrawing money and let it grow.
5. Expert help is only a phone call away: If you’re feeling overwhelmed, seek the guidance of a financial advisor. They’ll help you navigate the confusing world of retirement planning and make sure you’re on the right track.
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Remember, retirement planning is not a one-time event, but a lifelong journey.
