Planning For Your Retirement
Most of us understand the importance of retirement planning and saving enough to achieve financial goals, however, few recognize the significance of starting early.
Shifali Satsangee
Founder - Funds Ve'daa, Agra
Retirement is that one phase of your life when you plan to enjoy life after putting in years of hard work taking care of the desires of your family. While we might have spent the entire life in just keeping the official commitments, the post-retirement phase of life is just like an extended vacation with no formal meetings, but only the desires to be fulfilled. While it takes a long time before the time of retirement actually knocks, most of us may not be able to enjoy the life you once desired just because you did not plan right for a healthy corpus to take care of you post-retirement.
While planning for retirement is usually important and quite talked about goal for many of us, only a few actually board the investment journey to achieve that financial goal at an early stage. We only realize this fact, when we have already surrendered the first few precious years sans investing. The early we start, the better it is for our financial future, as the benefit of compounding helps you generate exponential returns over your original investments, thus making it easier to accumulate a healthy sum of money.
While many of the salaried individuals may still be under the cover of the Provident Fund, many of us may be committing a very dangerous mistake of withdrawing the PF corpus, especially while switching the jobs. On the other hand, the other professionals and business persons need to formulate their own investing plans aimed at ensuring a happy postretirement life.
Planning for retirement often tends to carry a long-term investment horizon for the investors, and thus, even investing in equity markets seems to be a safe option. While the equity markets tend to be choppy over the short term, they have generated generous returns for the investors staying invested for the long run. Investing in the products with high return potential tends to add the much-needed fillip to your dreams and financial goals. So, while it is important to start investing, it is equally important to keep the direction right, so that the efforts are utilised wherever they are needed.
When building a long-term portfolio, it is important for the investor to have an exposure to high-yielding investments so that one can reap the benefits of compounding in a better way. The small differences over the return often turn deadly for your financial goals, as the power of compounding coupled with high-yielding investments in the portfolio can help you accumulate a healthy sum of money over the long term.
Mutual funds as an investment product serve as a convenient option for the investors, as it lends the desired flexibility to the investor in terms of periodicity and the amount of the monthly investment through Systematic Investment Plans (SIPs).
One can easily register a SIP with the fund house, and the future SIP instalments would get deducted from the bank accounts automatically. Further, a wide range of mutual fund schemes allows the investor to make a choice between an aggressive fund or a conservative fund or more commonly used, a hybrid fund with an optimal asset allocation strategy and can be convenient in terms of staying invested with the companies suiting their risk profiles. As such, the investors can choose the mutual fund scheme best suiting their risk profiles.
Mutual funds have not been the preferred choice for investing till very recently, as was also evident from the financial bulletins and data from RBI. However, the recent 'Mutual Fund Sahi Hai' campaign has been instrumental in spreading investor awareness, especially in terms of avoiding to opt out of the investments in an arbitrary manner. This has helped in retaining the existing investor base and indeed adding the new retail investors to step into the world with goal-based investing strategy.
While the equity markets tend to be choppy over the short term, they have generated generous returns for the investors staying invested for the long run. Investing in the products with high return potential tends to add the much-needed fillip to your dreams and financial goals.
Further, a wide array of the investing campaigns have been guiding the viewers about what is the next right thing to do and also making the investors aware of different types of mutual fund schemes available for investing, including liquid funds, debt funds, large-cap funds etc.
Just like it is as important to save for your retirement, it is equally important to ensure that the financial journey continues to move towards the desired financial goals. While you may consider your retirement to be far away from what you have anticipated at the first glance, it assumes importance for you to take care of your retirement plans and your financial future at the earliest possible investment opportunity, even as you continue to enjoy your present.
The writer is a Founder - Funds Ve'daa, Agra Email: connect@fundsvedaa.com