The ideal time to start thinking about retiring is before your boss does. Retirement, as we all know, marks the start of a new chapter in our lives. One constant, though, is the requirement to pay your monthly payments. Hence, staying ahead of the curve and securing an appropriate pension plan for a happy post-retirement phase is critical. However, one dilemma many faces are how much money they should save for a comfortable retirement.
If you have an active retirement plan, you may use the retirement calculator to determine the amount you will receive at maturity. For others who are still undecided about the money they need for retirement, keep reading.
Factors to Consider For Retirement Fund
In retirement planning, there is no such thing as a one-size-fits-all strategy. Instead, several factors at work should be considered when planning for retirement. Some of the most crucial elements are listed below.
- Assess your retirement goals
When selecting a fund corpus, your current lifestyle and post-retirement plans are essential considerations. For example, people who want to keep their current lifestyle and have other financial goals, such as buying a new car or a house, may need more money. In contrast, people who seek a quiet lifestyle need much less.
- Retirement age
People who wish to retire early may need to contribute more to their retirement fund than those who intend to work until their late 60s.
In addition to the above criteria, things like other sources of income, financial commitments, monthly expenses, and an emergency fund are all criteria that will help you decide how much money you need in your retirement fund. Notably, you can use an online pension calculator to determine how much you'll earn depending on your monthly fund contribution, tenure, and retirement age.
Best Retirement Policies to Invest
The following are some of the best retirement plans on the market.
- Mutual Funds
A straightforward strategy is to buy a mutual retirement fund. These funds are long-term financial tools that help generate significant returns for investors. One direct approach to participating in mutual funds is the SIP route. Notably, the earlier you begin your retirement plan, the higher the expected corpus is owing to the power of compounding. You may also use a retirement calculator to determine the potential returns based on the necessary data submitted.
Mutual funds are preferable as several alternatives are available for investors with a variable risk profile, age, and policy tenure. Moreover, you get the risk cover during the term, an extra incentive with a mutual fund.
- National Pension Scheme
It is a government-backed plan that encourages employed persons to enrol during their working years. Since a percentage of the resources are invested in markets, the scheme provides market-linked returns. Employees can redeem 60 per cent of their corpus during retirement, with the remaining 40 per cent used to buy an annuity. This ensures pension for their entire post-retirement life.
- Atal Pension Yojna (APY)
It is a government-run deferred pension scheme for the unorganized sector. The plan is meant to offer participants guaranteed income in their old age.
Retired life is supposed to be quiet and free of life's cares, especially money. This is when your retirement plan becomes your genuine partner. However, a retirement calculator can quickly assess how much you need and the potential corpus created by a plan. This is highly beneficial in taking correct decisions.
