Find your suitable insurance plan
903
5 min read
Updated on Mar 13, 2023
In urban India, early retirement planning is planned by only those who have a risk appetite. The majority of the people think that early retirement planning is nothing but expensive and is mostly opted for by the rich.
Well, there are so many things to discuss on this, let us first start with the benefits of early retirement planning in India.
If you start building your retirement fund when you are young, it will be much easier for you. At a young age, the responsibilities are lesser and the disposable income is higher. As time goes by, the numbers of responsibilities grow; therefore, it gets difficult to save for the retirement years.
Under Section 80C, if you invest in the majority of the pension and investment plans, you will be eligible for tax exemption. Therefore, while planning for your early retirement, you will be able to save deductions on income tax.
If you are into an investment, you already know what compound interest means. It means getting interest on interest. If you invest your money for a longer time, you will get to know how compounding works. And the sooner you do it; the more beneficial it will be for you. You will also be able to invest regularly. By the time your retirement years come, you will have a huge corpus.
In the last twenty years, India has seen rising inflation. For example, inflation in 2020 was 6.2%. This means, that if you had earned INR 100 in 2020, the value of the same money in 2021 is INR 94. And when we invest in retirement corpus in old age, it often becomes difficult. With each year, the saving cost increases. Therefore, when you plan early, the chances of your achieving the target can be higher.
When you have enough funds accumulated, you will very easily be able to face an emergency. Seldom do we realize that life can turn around and the smooth part gets thorny. This is why starting early to invest in your retirement plan can help you in saving enough for your emergency fund.
Going back to 2010-2011, the average rate of a bank fixed deposit for up to 5 years used to be 7%. Today, it is around 5.3%. If you are opening a fixed deposit account and keeping your money there, the interest you will receive will be very less. While keeping money in FDs and RDs is not a bad idea but the process of building your retirement corpus will get slower. You should rather choose an early retirement plan that can easily beat inflation.
If you are now convinced about the concept of early retirement planning but wondering how to do it, here is an early retirement planning guide for you.
Once you are retired, your source of income gets lesser. Some people just stop having an income. In one such situation, the outstanding debts can be too bothersome for you. Therefore, when your retirement years are approaching, you should start clearing all the debts you have.
The benefits of financial planning from an early stage of life are many. You can also check out some of the best retirement plans that are available online. If you start taking baby steps as soon as you start earning, you will simply not have to worry after your retirement and can simply spend your days indulging in your hobbies.
Read More: Retirement planning Build a separate portfolio for medical expenses
Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.
View this post on Instagram
Early retirement planning is the process of assessing how much money you will need to retire comfortably and devising a strategy for saving and investing that money so that you may retire earlier than the usual retirement age.
The advantages of early retirement planning include the option to retire sooner than the standard retirement age, having more control over your retirement resources, saving more money in the long run, and enjoying a more comfortable retirement.
Early retirement planning should begin as soon as feasible. The earlier you begin, the more time you have to save and invest your money, which can result in large long-term savings.
Investing in retirement accounts such as 401(k)s and IRAs, decreasing costs to raise savings, working to enhance your income, and seeking the advice of a financial counsellor are all standard early retirement planning tactics.
Early retirement planning, like any other financial decision, can be dangerous if you do not thoroughly research and prepare your approach. Before committing to a retirement plan, it is critical to analyse your financial circumstances and establish whether early retirement is a reasonable choice for you.
PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
Senior Citizen Savings Scheme (SCSS) commonly known as SCSS is a government backed savings option for elderly citizens of India. Let us understand this well-designed.
Mar 21, 2023
5 min read 
Fixed deposit (FD) is an investment option that allows an investor to invest funds for a fixed tenure to earn good returns at fixed rate.
Mar 20, 2023 5 min read 
The best thing about investing in a Fixed Deposit is that it is a risk-free product that helps investors to earn good returns. You can.
Mar 20, 2023 5 min read 
Have you ever come across a situation where your family members started convincing you to open an RD account since you are financially independent now?.
Mar 20, 2023 5 min read 
Fixed Deposit (FD) is a secured investment option that allows the investor to gain guaranteed returns. However, there are occasions you may have to withdraw.
Mar 20, 2023 5 min read 
If you want to calculate the income tax to be paid on your salary, you have to understand the tax laws and tax jargon. This.
Mar 20, 2023 5 min read 
Old age is the time when people face greater challenges in life which get worse due to the financial crisis. Hence, saving in advance to.
Mar 17, 2023 5 min read 
Bank of India (BOI) is a reputed name in India’s banking sector and offers a wide range of products and services to its customers. In.
Mar 17, 2023 5 min read 
Goods and Services Tax was introduced in India in 2017 and it soon made headlines. The reform touched almost all sectors as well as the.
Mar 16, 2023 5 min read 
When it comes to securing your family monetarily after you are gone, you can trust life insurance policies by LIC for sure. In this post,.
Mar 16, 2023 5 min read 
Corporate Office : Mahindra Insurance Brokers Ltd ( A Mahindra Group Company ) Sadhana House, Ground Floor, 570 P. B. Marg, Behind Mahindra Towers, Worli, Mumbai 400018.
Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).
Insurance is the subject matter of solicitation.
For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.
Copyright © 2023 Mahindra Insurance Brokers. All Right Reserved.
Get A Call Back