Retirement Planning:

Considerations, stages,
Methodology

Date: 8-February-2022

By Mr Akshay Gupta, CFA Lifestyle choices such as where to live, when to retire, and when to stop
Email akshaygupta@sgsfinlease.com working are among the non-financial aspects. A holistic approach to
Phone +91-011-40071013 retirement planning takes all of these factors into account.

At different phases of life, individuals place varying amounts of

What is "preparing for retirement"? Considerations, Stages, and
emphasis on retirement planning. For example:
Methodology
Early in a person's career, retirement planning involves setting aside
Planning for retirement entails identifying retirement income goals and
sufficient funds for retirement. In the midst of your career, it may also
the means necessary to attain them. In order to do so, one must identify
involve establishing specific income or asset goals and taking action to
sources of income, estimate expenses, implement a savings program, and
attain them.
manage assets and risks. The retirement income objective is reached by
estimating and investing future cash flows correctly. Once you reach retirement age, you transition from the accumulation
phase to the distribution phase. No longer contribute to your retirement
Key Takeaways
account(s). Instead, your years of savings begin to pay off.
Retirement planning can never be too early or too late.
How Much Is Required for Retirement?
The term "retirement planning" refers to the financial strategies of
Remember that retirement planning begins well in advance of retirement.
saving, investing, and ultimately disbursing funds intended to sustain an
In general, the earlier you begin, the better. Your retirement number, also
individual during retirement. Numerous popular investment vehicles
known as your "magic number," is extremely individualized. However,
permit retirement savers to expand their funds with favorable tax
there are numerous rules of thumb that can provide an estimate of how
treatment.
much you should save.
In addition to assets and income, retirement planning takes into account
Whom you question determines how much you need. For example:
future expenses, liabilities, life expectancy, and estate planning for
passing your wealth to the next generation. People used to remark that a comfortable retirement requires
approximately 10 crores.
Understanding Retirement Planning

In the most basic sense, retirement planning is preparing for life after
paid employment ends. This is true not only financially but in every
aspect of life.

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Retirement Planning:
Considerations, stages,
Methodology
Date: 8-February-2022
Other professionals employ the 80 percent rule, which states that you
must be able to retire on 80 percent of your income. Consequently, if you
earned Rs 50,000,000 per year, you would require savings that could
generate Rs 40,000,000 per year for approximately 20 years, or a total of
Rs 8 crore, including the income generated by your retirement assets.
Others argue that most retirees are not saving nearly enough to meet
these benchmarks and should modify their lifestyles accordingly.
In addition to considering the quantity of money you'll need in your nest
egg, you should also consider all of your expenses. Be careful to
calculate the costs associated with your housing, health insurance, food,
clothing, and transportation. In addition, since you will have more leisure
time, you may want to consider the cost of entertainment and travel.
Even though it may be difficult to come up with exact numbers, be sure
to come up with a reasonable estimate so that there are no
disappointments in the future.
Retirement Planning Steps
Regardless of where you are in life, there are several essential steps that
nearly everyone must take when planning for retirement. The following
are among the most prevalent:
Prepare a strategy. This includes determining when you would like to
begin saving, when you would like to retire, and how much you would
like to save for your ultimate objective.
Determine how much you will save each month. Using automatic
deductions eliminates uncertainty, keeps you on track, and eliminates the
temptation to stop or neglect to deposit funds on your own.
Select the appropriate investment alternatives.
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Periodically review your investments and make periodic adjustments.
Whenever there is a change in your lifestyle or when you enter a new
phase of life, it is always a good idea to make any necessary adjustments.
Retirement planning takes your entire financial situation into account.
Your Residence
The home is the single largest asset owned by the majority of
individuals. How does this factor into your retirement strategy? In the
past, planners viewed a home as an asset, but since the housing market
collapse, they view it as less of an asset.
There is also the matter of whether you should sell your home upon
retirement. If you still reside in the home where you reared multiple
children, it may be larger than you need, and the costs associated with
keeping it may be substantial. Your retirement plan should include an
objective evaluation of your property and its disposition.
Your investment accounts should become more conservative as you age.
People at this stage of retirement planning have limited time to save, but
there are a few advantages. You may be able to invest more of your
income if your wages increase and some of your expenses (student loans,
credit card debt, etc.) are paid off by this time.
This is also the time to think about long-term care insurance, which can
help cover the costs of a nursing home or residential care in your later
years. If you fail to adequately plan for health-related expenses,
especially unanticipated ones, they can deplete your savings.
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Retirement Planning:
Considerations, stages,
Methodology

Date: 8-February-2022

Insurance
Protecting your assets is a crucial aspect of retirement planning. Age is
associated with increased medical costs; for this, there is health and life
insurance to consider.

An annuity is another form of policy issued by an insurance company. A

pension is comparable to an annuity. You deposit funds with an
insurance company, which then pays you a monthly sum. There are a
variety of options and factors to consider when deciding whether an
annuity is appropriate for you.

The Conclusion

Everyone longs for the day when they can leave the workforce and retire.
However, doing so is costly. This is the purpose of retirement planning.
And it makes no difference where you are in your life. Putting money
aside now means you will have less to worry about in the future.

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Retirement Planning:
Considerations, stages,
Methodology

Date: 8-February-2022

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