When you are working, you can make all sorts of financial adjustments to achieve most of your financial goals. However, that freedom is lost once you are retired. So, it’s important to plan your retirement very carefully and avoid all the mistakes. Let’s find out some of the important steps involved in retirement planning.

Ascertain The Appropriate Retirement Age

The normal retirement age in India is 60 years. However, in actual life, the retirement age may vary from person to person depending on several factors such as income, lifestyle requirements, health conditions, savings, financial obligations, etc. Depending on these factors, you must determine your appropriate retirement age. For example, if your income is high and you can save a good amount at an early age, you may plan a retirement before 60 years. On the other hand, if you have several debt obligations or you can’t save enough money, you may plan a late retirement age.

Estimate The Corpus That Would Be Sufficient For Your Retirement

After you determine the appropriate retirement age, you need to figure out the size of the corpus that would be required in your retirement to meet your short and long-term financial goals. The corpus should be adequate to meet your lifestyle expenses, medical bills and other important payments for your expected life after retirement. The retirement corpus should take into account expenses such as travel, parties, gifts to children, home maintenance costs, insurance premiums, etc.

Make Your Investment Plan

Now you know when you will retire and how much corpus you will need at the time of retirement. Depending on your income and years left for your retirement, you can easily estimate how much money you need to invest regularly and the ideal return on investment you should target to get the desired retirement corpus. Based on these parameters, you can choose the appropriate investment instruments at various stages in your life. For example, at the start of your career, you may take a little higher risk and invest in the high return investment products such as shares and equity mutual funds, and as you get older, you may increase the exposure to low-risk investments such as debt mutual funds, small savings schemes, etc.

The earlier you start the investment for your retirement, the easier you’ll find it to reach the desired retirement corpus. The best way is to identify your retirement goals as soon as you start your career and start investing immediately. Early investments allow a longer tenure; thus, you can build a bigger corpus with the help of compounding of return.

Retirement plans for every person may vary depending on their risk appetite, income, lifestyles and several other aspects, so it’s advisable to try getting your retirement plan customized by an accredited financial planner for higher accuracy and better results.

The author is an independent financial journalist