Planning for retirement is important for everybody. Owing to a sedentary lifestyle, you are more vulnerable to ailments, such as diabetes, hypertension and heart attacks. Healthcare costs are increasing with each passing year. In the absence of a social security net, you need to have your own funds to fund for all these expenses.
Like many others, you might be thinking that it’s too early to start planning now. At this rate, you begin retirement planning late and accumulate a smaller amount as compared to what you could accumulate given that you started early. This is due to the “magic of compounding”. It enables you to even retire early and lead a hassle-free life.
While planning for retirement, you need to clarify a few points like deciding an age at which you want to retire. Along with that, estimate how much money you will need every month to meet your post-retirement expenses.
Suppose that you plan to retire at 60 years and your monthly estimated expenditure after retirement is Rs 50000. Assuming a rate of return of 12%, you need to contribute a SIP of Rs 2,900 every month for 30 years to accumulate a corpus of Rs 1 crore. You can easily calculate your retirement contribution using our retirement calculator.
