21BSP0139 SAYAN PODDER 21BSP0139

ASSIGNMENT –5
WEALTH MANAGEMENT

RETIREMENT PLANNING

Retirement planning is the process of setting retirement income goals and the actions and decisions
necessary to achieve those goals. Retirement planning includes identifying sources of income,
estimating expenses, implementing a savings program, and managing assets and risk.

Retirement planning is being prepared for life after paid working period ends financially as well as all
other aspects of life. The non-financial aspects include lifestyle choices such as spending time during
retirement, a place to live, designated time to completely quit working, and others. A holistic
retirement planning considers all the areas with equal importance.

The level of emphasis on retirement planning varies throughout different life stages. During the
youth, retirement planning only means setting aside enough funds for retirement. During the middle
of the career, it might change to setting specific income/asset targets and taking the necessary steps
to realise them. Once we reach retirement, decades of savings will pay out.

NEED FOR RETIREMENT PLANNING

Retirement planning doesn’t mean one should only concentrate on their finances. Retirement
planning requires a combination of financial and personal planning. Personal planning determines
one’s satisfaction during their retirement.

On the other hand, financial planning helps in budgeting income and expenses based on the
personal plan.

Primarily personal planning revolves around the question ‘how does one want to spend their
retirement?’ Having an idea of how retirement should be will help in determining financial needs.
For example, some might want to travel the world during their retirement, while others would like
to learn a course or two, or volunteer at an NGO. The retirement options are endless.

However, having an idea about how one would want to spend their retirement is the first step
towards retirement planning.

The lifestyle needs and preferences will help in estimating the finances. Therefore, financial planning
will help in creating a retirement fund.

21BSP0139 SAYAN PODDER 21BSP0139

21BSP0139 SAYAN PODDER 21BSP0139

Following are the reasons why retirement planning is essential:

• One cannot work forever.

• The average life expectancy is increasing.
• Higher complications, e.g., medical emergencies.
• Best time to fulfil life aspirations.
• Relying on one source of income is risky, e.g., pension.
• Do not depend on children.
• Contribute to the family even during retirement.
• Start planning early and diversify investments.

Therefore, to lead a peaceful and uncompromised life during retirement, it is essential to start
planning and investing towards it.

21BSP0139 SAYAN PODDER 21BSP0139