One of the biggest fears one has when approaching the age of retirement is the amount of money left in the bank. This is why the government of India established the Pension Fund Regulatory and Development Authority (PFRDA) in the year 2003 to develop and regulate the pension sector in the country. Additionally, the National Pension System (NPS) was started on 2004 with the aim of offering retirement income to all the citizens.
After retirement, a senior citizen does not have a regular income. The government pension is well and good, but if he or she does have the extra cash, the standard of living will increase, resulting in a better quality of life.
So how much money do you need to retire comfortably in India?
Burden of retirement gets heavier
Due to the ups and downs of the Indian economy, including demonetization and inflation, the burden of retirement gets heavier.
Added to this, is the amount to be withdrawn from the retirement fund to pay for the income tax.
Of course, you need to calculate the expenses that would eat away at your funds, including medical bills (cost of managing health is always higher in the case of old age), yearly vacation as well as emergency situations.
So how do you manage to actually save for your retirement?
The answer is simple.
Before the age of retirement
Before the age of retirement, you have a regular and a fixed source of income. And from this amount you save money for your retirement.
So after retirement, you do not have the means to add to your funds. Now the next step is to invest your retirement fund intelligently. This investing venture is used to generate a fixed income.
After the age of retirement
The following points of investment must be followed after retirement:
- Take full advantage of tax savings.
- Develop an emergency savings fund before starting to invest in a retirement fund.
- Do not get scammed by certain retirement planning schemes which often charge high rates.
- Maintain a varied investment portfolio.
- Having goals is essential. Investing without an objective in mind, it is like you are planning to lose money.
- Invest in equity while focusing on income generation.
- Do what you feel is right. Listening to everybody’s advice results only in confusion.
Cash flow into your retirement fund
Although certain companies offer a pension for their retired employees, it is usually not enough to manage expenditures. So the best way to ensure a steady cash flow into your retirement fund is to invest wisely in a sound scheme or plan.
There are many options including:
- Senior Citizens Saving Scheme
- Fixed Deposits
- Post Office Monthly Income Scheme
- Reverse Mortgage
- Mutual Funds
So, make sure you start planning from now. It is never too late to start saving up for your future. Planning and acting now will ensure that you will lead a better standard of life once you retire, increasing the quality of life that you lead.
