Generally, a happy retirement is about leisure time, freedom, and peace of mind. For a majority of us, retirement is all about enjoying a book without constantly worrying about the project deadlines, to travel with the family to a favourite destination sans calls from work, and to be blessed with good health.

Sounds great, doesn't it?

But you see, most individuals procrastinate when it comes to saving for their retirement. Young adults seldom plan for it, because buying a house, car, and planning for luxurious vacations matter more than allocating a part of their savings towards the retirement fund.

On the other hand, for individuals who constantly worry about their retirement, questions like: "Will I outlive my corpus?" and "What will the state of my health be during retirement?" are common. The primary reason for this is the delayed implementation of a retirement plan. For them it is a goal that they seriously think about in their mid-40s, having lost precious time. Compounding would have worked in their favour through the decades, had they started early on.

In any case, responsibilities increase as you age. During your 30s, buying a home, car and vacation were on top of your priority list. You try to keep up with your neighbours and seek a better lifestyle. You spend more than you save and postpone allocating funds for your retirement at 40.

When you turn 40, your kids have grown up, and planning for their future (higher education and marriage) seems to be a more pressing and immediate need. Your parents who by then have crossed their prime may be financially and emotionally dependent on you and so planning for your retirement is postponed to your 50s.

However, when you are 50, it dawns that precious time has lapsed. Have a look at the table below to allow the picture to sink in.

  Planning for a blissful retirement…

Savings per month to build a retirement corpus of Rs. 5 Crore
Current Age	20	25	30	35	40	45	50	55s
Retirement Age	60	60	60	60	60	60	60	60
Years left to retire	40	35	30	25	20	15	10	5
Amount needed on retirement (Rs)	50,000,000	50,000,000	50,000,000	50,000,000	50,000,000	50,000,000	50,000,000	50,000,000
Return (CAGR)	12%	12%	12%	12%	12%	12%	12%	12%
Amount to be saved per month (Rs)	5,154	9,159	16,383	29,652	54,872	106,054	225,296	622,345

(Note: The table if for illustration purpose only)
(Source: PersonalFN Research)  

Statistically, women live longer than men. Ironically, they are expected to take a break from their careers to start a family, care for the young and the elderly, and are more prone to health related conditions (such as Ovarian Cancer, Breast Cancer, Uterine Cancer, Ectopic Pregnancy and Endometriosis etc.) than men—all leading to decreased career earnings and decreased contributions to retirement plans.

What is the way out?

Start early, do not hesitate to cut unnecessary expenses, invest regularly, and have a dynamic mix of assets to reach your retirement goal. Here's a strategy:

  Smart investing...

Asset Allocation Strategy
Risk Profile	Aggressive			Moderate			Conservative
Age	Equity	Debt	Gold	Equity	Debt	Gold	Equity	Debt	Gold
20 to 30	75 - 80	15 - 20	0 -10	65 - 70	25 - 30	0- 10	40 - 45	55 - 60	0 - 5
31 to 40	75 - 80	15 - 20	0 -10	60 - 65	30 - 35	0 - 10	40 - 45	55 - 60	0 - 5
41 to 50	60 - 65	35 - 40	0 - 5	50 - 55	45 - 50	0 - 5	35 - 40	60 - 65	0 - 5
51 to 60	40 - 45	55 - 60	0 - 5	30 - 35	65 - 70	0 - 5	25 - 30	70 - 75	0 - 5

(Note: The above table is for illustration purpose only)
(Source: PersonalFN Research)
The truth about retirement planning isn't all white and black. You will be required to take a lot of things into consideration:

• Your current lifestyle;
• Age at which you plan to retire at;
• Current monthly expenses;
• Contingency corpus;
• Healthcare costs;
• Life insurance coverage;
• Net worth;
• Financial and lifestyle goals on retirement; and
• Much more!

 

There are other assumptions to be considered too, such as: inflation rate, the rate of investment, and your life expectancy.

Although, it may seem complex, a trusted financial guardian could assist you stay on track and avoid dangerous U-turns.

When you are planning for your retirement, make sure you consider life uncertainties too. For example, death of the spouse, change in relationship status, nurturing a child with special needs etc.

What would you do in such circumstances? Do you have an estate plan in place? Have you got a trust fund in place for your child? Have you vetted the trustees?

We all pray for the security of our family, but we turn a blind eye to these questions realising too late the importance of the answers. Remember, "Retirement is a journey and not a destination".

Hence, as you plan for the golden period of your life, it is equally important to balance fun & play with prudent planning. ?

In our ensuing article, we will talk about the estate planning needs of women. So stay tuned to www.personalfn.com and keep sharing your views with us.

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