16/10/2022
*Building a retirement corpus - Five things you need to know*
We now know the importance of planning for one’s retirement.
Retirement Planning – the what, why, and when and Retirement Planning – the how, where and which decoded.
Now that we have understood the basics and importance of retirement planning, here are five things you could keep in mind while building your retirement corpus:
*1. Age and Life Expectancy*
Two things are in play here – the age at which one is planning to retire, and an *estimate of the number of years* post retirement for which they need funds.
An *early retirement,* say, at 40 years, means that not only does an individual have fewer years to build a *retirement corpus,* but also needs to accumulate funds for several years – maybe 35-40 years, if the *life expectancy* is 75-80 years.
*Retiring at 60 years,* on the other hand, would mean that not only does one have more years to *accumulate the funds,* but they also need to build the corpus for fewer years – say about 15-20 years.
*2. Rate of Inflation*
One would typically start building their *retirement corpus* 20-30 years before they retire. When taking your *expenses* into account, it is extremely critical to factor in *inflation.*
This means that, for instance, the *purchasing power* of ₹50,000 will be significantly lower by the time you retire, if we remain in an *inflationary environment.* Estimate the monthly and annual expenses you would need accordingly.
*3. Rate of Return*
You would not withdraw your entire corpus as soon as you retire. This means that while you withdraw a little, the rest of it remains untouched – but preferably invested. *This corpus should continue to earn for you,* although you could consider investing in instruments which are not *high on risk.*
*4. Wealth Distribution*
Several people wish to distribute their *wealth or savings* in this phase of their life. This needs to be considered when deciding on the amount of corpus you would need.
*5. Regular review*
Planning for retirement is probably *one of the longest goals.* While one must choose instruments are likely to *do well in the long term,* it is equally important to *periodically review your portfolio. If your portfolio* is not performing in line with your estimates, you could consider churning it.
_We will continue to share more of such tips with you, and in the meantime you can plan for your retirement and start an SIP or invest in Guaranteed Pension Plan today_
_*Building a retirement corpus*_
_*Reach out for more details:*_
_*smarTvisor*_ _*Rahul Singh*_
📞 _*9897879477,*_ _*9758580670*
