How much difference will it make to your retirement corpus if you increase your savings only by 5 per cent? Let’s understand with the help of an example. Suppose you are 30 years old and plan to retire at 60. You invest Rs 20,000 monthly, and the average rate return for the next 30 years is expected to remain around 10 per cent per annum. In this case, your retirement corpus would be around Rs 4.56 crore.

Now, let’s assume you can save 5 per cent more money for monthly investment, and now you invest Rs 21,000 every month. With an extra 5 per cent saving, you could make a retirement corpus of around Rs 4.79 crore, i.e., Rs 23 lakh more for your retirement corpus. So, a side hustle can definitely help fund your retirement, but it needs to be very disciplined and consistent for the long term to be effective. The earlier you start the side hustle, the greater the retirement fund you can build.

Manage Your Debt To Reduce The Interest Costs And Charges

When you avail debt facilities like a car loan, home loan or personal loan, you can look for ways to reduce the interest cost as much as possible. You can use strategies like debt consolidation, prepayment of debts, getting the interest rate reduced by managing a higher credit score, etc. You can use the saved money to invest towards your retirement.

Take Care Of The Return On Your Investment

It’s important to get an adequate return on your investments at different stages in your life. For example, when you are young, you should focus on a higher return; at mid-age, you may like to secure a moderate return on your investments, and as you get closer to retirement, you may settle for a low but safer return on investments. A little extra return in the early stage can significantly boost your retirement corpus.

Plan Your Taxes Well

Two people with the same income, one ending with a huge retirement corpus and the other ending with little, why? The answer is the first one smartly planned the taxes, reduced the unnecessary tax outgo and used the saved money to boost the retirement corpus, while the second person never planned the taxes and ended with a small retirement corpus.

You can save a lot in the long term if you plan your taxes well. Invest in tax planning instruments, buy health and life policies and take the help of a tax planner to reduce the tax outgo.

Smartly Use Your Credit Cards

Most credit cards offer reward points or cashback, ranging from 1 per cent to 4 per cent on your regular spending like groceries, tax payments, utility bill payments, etc. Also, you get up to 52 days to repay the outstanding bill on your credit card. So, in the long term, you can easily save around 2% on your spending. Such savings can be deployed for investments towards your retirement corpus.

Earn More To Save More

You can start a freelance activity like consultancy work, online tuition, tax filing or something related to your skills to earn more income. Such extra income can be used to invest towards building your retirement corpus.

A side hustle should always be considered along with your basic retirement planning. Apart from side hustle, a strict financial discipline and a correct investment approach can further help to build a bigger retirement corpus.

 The author is an independent financial journalist