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Why Retirement Planning is Important
Nimisha KarnikRetirement is something that very few people think about when they’re employed. By the time they do start thinking about retirement, it is usually too late. If you’re currently employed or even newly employed but haven’t started thinking about your retirement, then this is the article for you. It isn’t too early to start planning, no matter who tells you so. Read on to know why you shouldn’t put off planning your retirement, how you can start your planning and how you can make the most of the least investment from you, now.
Most people don’t think about planning for their retirement until they’re about to retire. This is not the smartest thing to do. On an annual basis, inflation makes it difficult to make ends meet while you’re still employed and have a regular source of income. In the future, the inflation may have skyrocketed, and you won’t even have a regular income. Age might mean that your medical expenses also increase, and you may or may not be covered by insurance. These are things that you need to prepare for and tackle early in life, so that you don’t need to worry during your sunset years. In fact, it is best that you start saving as soon as you start earning because building a nest egg takes a lot of time and effort. Here are some things that you can do to prepare for when you no longer earn a living.
Firstly, save before you spend. It might seem a very simple thing, but it often isn’t. People tend to assume that they will save whatever is remaining at the end of the month, but it just so happens that there is very little left to save. This is why you should save first and spend later. It is preferable to save at the very least 10% of your income before you dip in to spend the rest. Further, make sure you save more when you get a raise and bonus, too. This is for the simple reason that you can benefit from compounding interest. Even with compounding interest, the amount of money that you gather may end up being less than necessary. If you have trouble saving on your own, then invest in a retirement plan from a reputed life insurance company. This will ensure that you make regular payments towards your future. This will also ensure that you don’t dip into your corpus before you retire. After all, you’ll be starting at square one if you start depleting your savings before you retire.
The best thing to do is start your retirement planning the moment you start earning. Start investing early and you will have the luxury of time. This will translate into you not being forced to reserve a large chunk of your earnings for investment. By picking a plan, you also have the assurance that your money will continue to grow – all you need to do is keep paying your premiums. You might even end up saving a chunk of your money by using such plans to save on tax. The bottom line is that you need to start saving early, so that you don’t have to worry about money later.
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