Retirement before 60: If you do not want to continue working till the age of 60, then you have to prepare a plan from your youth. It is not that it is impossible, but for this, if you prepare plans from your youth right now, then before the age of 60, you will be able to prepare a good fund and after that retirement will be good. Let us see through which options you can prepare a plan to retire before 60 years. The sooner you prepare an investment plan for retirement, the sooner you will be able to achieve your goal. For this, first of all, make a goal of how much your financial needs will be in future.
Invest in equity
Equity is considered very risky for investment, so most investors stay away from it. However, returns are highest in this. If you start investing early, then you will get much longer time to invest. You can choose some stocks which can grow fast in future. You should invest a part of your monthly investment in equity and keep in mind that instead of investing in a single stock, invest in multiple stocks. Another thing to keep in mind when choosing multiple stocks is that they should be of different segments.
If you do not want to take too much risk, then you can also invest in debt in addition to equity. Investing in debt is relatively safer than equity. SIP can be done in a balanced fund. It invests in both equity and debt funds and through this a large amount can be raised till retirement.
Buy health insurance
After an age, most expenses are incurred on health. If preparations are not made about this, then whatever savings you are making for the future or you are preparing a strategy to invest in many other schemes will not work. In such a situation, buy health insurance and take it not only for yourself but also for your spouse. One more important thing is that the sooner you buy it, the better it will be because at a young age you will have to pay a lower premium for taking health insurance.
One special thing to keep in mind in the case of health insurance is that it should be doubled every five years. The biggest reason for this is that health expenses are increasing with the passage of time.
Make strategy based on inflation
It cannot be imagined to think about buying the same item even today at the same price at which it was being sold for 25 years. In such a situation, assess for the future whether things can be purchased at the present price after 25 years in the future? Your answer will be no. In such a situation, keep inflation in mind while planning the future. To understand this, we can take an example. If the monthly expenditure today is Rs 1 lakh, then in the next 20 years, at the rate of 7 percent inflation, about 3.5 lakh rupees will be required every month.
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Make emergency arrangements
While planning for the future, do not forget your current needs. Emergency situation can come at any time, in this case be prepared beforehand. Along with preparing for retirement, also prepare an emergency fund. With this, the investment strategy you are adopting for retirement, you will not have to leave it in the middle, ie it will not be possible to withdraw your investment. Emergency arrangements should be made for at least 12 months.
End your liabilities before retirement
Let’s say that you are planning to retire for 55 years, then by this age you should end all your liabilities. Liability also includes education of children, marriage and loans. If you have taken any loan, repay it before retirement.
(Note: This information is based on a conversation with Tareesh Bhatia, who is a registered financial advisor at SEBI-registered firm Advantage Financial Planners LLP.)
