According to a 2023 PGIM India Mutual Fund survey, as many as 67 per cent of Indians said they have a retirement strategy in place, up from a 2020 survey when only 49 per cent of the respondents reported having a retirement strategy. The survey results show significant attitudinal changes regarding retirement as more people prioritise planning driven by their desire to live a good lifestyle and ensure financial security in old age.

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Plan Early:

The mantra for early retirement is to start planning early. Ideally, you should start investing in your 20s or 30s. You can create a huge corpus for retirement by investing in mutual funds, Public Provident Funds (PPFs), stocks, etc., early. For example, if you invest Rs 20,000 per month for a little over 19 years, with a minimum 12 per cent average annual return, the corpus will grow to over Rs 1.5 crore.

Determine Your Retirement Corpus:

One of the thumb rules to determine the corpus is the “20X rule”—it says your retirement corpus must be 20 times your annual expenses before retirement. For instance, if your yearly expenditure is Rs 10 lakh, your retirement fund should be Rs 2 crore. Of course, a retirement corpus should also account for inflation and healthcare costs. Hence, periodic portfolio reviews and updates are critical to reaching the desired target.

 Diversify Investments:

Do not keep all your eggs in the same basket. Your investments should be spread across asset classes, such as equities, fixed deposits, and real estate. The more diversified it is, the lesser the risk and greater stability during volatile periods.

 Embrace Financial Discipline:

The rules of FIRE—Financial Independence, Retire Early—can help you save aggressively as your income increases as you move up in your career. Live within your means at all times. The objective is to invest aggressively for retirement, reduce unnecessary expenses and stay healthy financially.

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Plan Healthcare Expenses:

Critical illnesses can erode your savings quickly. Hence, there should be adequate critical illness insurance coverage for emergencies. Ensure your corpus is big enough for retirement, so allocate funds for long-term care expenses.

The two magic mantras are diligence in planning and consistency. If you plan well and diversify, reaching your financial goals will be easy, and you can retire in style with financial security and peace of mind.