Planning for withdrawal early in your existence has appeared a must with the cost of living increasing up. You can start saving and spending only from your mid-twenties in order to create a retirement corpus that will be enough for you. The subject of retirement planning is swept off by many young people because they believe it’s too early to save for anything too far out in the potential. Many relatively close financial obligations such as owning a house or vehicle, supporting the schooling of children, marriage and so on. are their focus, and as a vital objective, it is very possible to lose track of retirement in the middle of all this. You need to start asap if you are in your thirties and have not yet begun dreaming or investing for your retirement. Considering the same you can follow the below 5 strategies to create a good corpus for your retirement life:
Employees Provident Fund or EPF: The very first thing that can be labeled for your retirement benefits if you are a salaried worker is your EPF portfolio. Under employees’ provident fund a part of your salary is deducted by your employer each month automatically. Your employer generally combines the contributions from the EPF. As savings are made automatically, EPF is an outstanding resource. EPF is a strong option that, as part of retirement investments, can be set aside solely.
Voluntary Provident Fund or VPF: Although EPF is a good resource for retirement savings, is it too much? Quite definitely not. For retirement, you need to invest more and you can do so by saving more to your PF account willingly. VPF is the discretionary contribution rendered by employees above and over the 12 percent contribution to EPF to their provident fund account. The VPF contribution is at the same pace as the contribution from the EPF. Up to 100% of the basic salary and Dearness Allowance (DA) can be deposited in VPF by a salaried employee.
Public Provident Fund Or PPF: At times, employers don’t have an EPF facility. You can also apply to a PPF (public provident fund) account if you are in a comparable predicament. If you have little to begin with, a combination of EPF plus PPF is a decent start for creating a retirement corpus. That being said, as PF securities are debt products, they realize that their returns will not be adequate to beat inflation. So, you will have to invest in equity securities that are proven to offer long-term, inflation-beating yields.
Don’t ignore your savings: When your salary grows from promotions and increases over the years, you need to ensure that you still raise your daily retirement savings. As soon as possible, you can begin preparing for retirement. The faster one begins, the easier it is. The force of accruing operates in your favor for more years by beginning early and you can build a broad pension corpus by saving even small amounts of money. As you are older, odds are that you gain more and, thus, by spending more in the remaining years, the time wasted in not investing earlier will be made up to some degree if you are young and not have started planning for your retirement.
Other investment option: You should also begin investing actively in equity funds whether you are a balanced or an active investor and have a high risk threshold. Your portfolio will have a mix of debt (EPF, VPF, PPF) and equity securities in this case (equity funds). It is highly recommended to have a large portion of your regular savings going towards equity funds if you are going to start to save for your retirement. If you have some periods in front of you, this investment will help you gain better returns over long periods of time.
Conclusion
It’s important to note that you must not be apathetic about saving for retirement. You ought to bear in mind that retirement planning or savings is not something you can quickly delay. If you haven’t, you need to start now. The later you arrive, the tougher it is to create a broad corpus. You can quickly create a substantial corpus over the years if you start early and keep spending or saving regularly. You should also consult a financial advisor if you have questions, to find out how much you need to save to generate wealth for your retirement.
