Save for Retirement
If you are wondering how to save Rs 10 crores for your retirement, you have arrived at the right place. You can follow the simple guidelines given in this article to save enough money for your future so that you can enjoy a comfortable lifestyle without any problems. In today’s world, a figure of Rs 10 crores is considered well enough for many people who are thinking about retirement planning. If you plan it in a proper manner early in your life, you should not have any issues in achieving this task.
Calculate your current earnings and savings
The first step begins with calculating your current earnings and your existing savings. If you have just started earning in your career, you will have better chances of saving Rs 10 crore for retirement planning as you will have many opportunities in future to save money and earn more money by investing in various options. On the other hand, if you are in the middle age category, you have to take it very seriously and start saving money for your retired life.
In general terms, an annual earnings of Rs 10 lakh is required to plan for a corpus of Rs 10 crore in the next 20 years. In this regard, you should try to save the maximum amount of money from this earnings and invest it in the right place at the right time. If you are a salaried person, you will have a steady income and it becomes easy to plan your savings in future. However, if you are a business person or self-employed person, you have to be slightly careful as your income may not be steady and you need to have control over your expenses. In this situation, save money whenever possible and invest them in a suitable pension plan.
Choose a good pension plan
Once you have proper idea about your earnings, you should begin a proper pension plan early in your life. It is always a good idea to consider saving 10% of your earnings on a monthly basis for your pension plan. You can consider this a compulsory option and save money regularly without making unnecessary expenses. Remember that it is very easy to spend excess money on useless things and you should avoid them at any cost.
Invest lump sum money in pension plan
If you have business income or irregular income, it is a wise idea to invest lump sum money into your pension plan. Your retirement planning will become easy when you invest money at once as you will not be able to touch them for a long duration. This can also help you to get tax benefits in the short term.
Invest in SIP
If you earn regular salary, you can choose the SIP option and save money on a regular basis. Once this becomes a habit, you will be able to manage your expenses even after investing money in the pension plans. This can also provide tax benefits if you choose the suitable plans available in the market.
Never touch your PF
Another point you have to be careful is to not touch your PF money if you are a salaried individual. Remember that whenever you change your job, you will have the option of withdrawing the PF money and you should not fall into this temptation as the money can get utilized for immediate needs. On the other hand, not touching them for at least 20 years can give you a good corpus of funds in the long run.
Invest in equities
You have to understand that investing in equities gives the best returns in the long run and this should always be part of your retirement planning. However, you can reduce the exposure to this asset class as you age and prefer the debt options when you are close to 50 years. It is possible to invest regularly by choosing mutual funds or you can also directly invest in equities when you have lump sum money.
Invest in real estate
Investing in real estate market can also fetch you good returns in the long run. If you have any property in the urban area, you can use it to build a home for yourself so that you can save on rental expenses. If you have additional money, you can choose to invest in other properties and expect good returns from them in future.
Plan your life insurance and health insurance
Never ignore your life insurance and health insurance plans as they can become costly when your age increases in future. If you begin early, you will be on the safer side and you can avoid medical expenses and also get life cover by choosing the appropriate plan. Remember that your retirement planning is incomplete without these plans.
In this manner, by segregating your investment among different asset classes, you will be on the safer side and you can reach a pension corpus of nearly Rs 10 crores in the next 20 years. You will be able to get a major portion of the corpus from equities and real estate investment. The remaining will come from pension plans that provide steady and regular income after your retirement. Even your PF can give you more than one crore for your retirement planning if you save money on a regular basis and allow it to grow for a long duration. You can also choose to invest in various fixed income schemes and get compounded interest for your investment in the long run. All these simple ideas will go a long way in building the required funds for your retirement in future.