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How much funds should there be for retirement?

You can't work for money your whole life. Everyone wants to accumulate a fund of crores by the time they retire, even if they can't become rich in their working life. So that they can spend the rest of their life comfortably. Generally, the retirement age is considered to be 58 to 60 years. But these days, people are getting crazy about taking early retirement. By doing this, they want to spend the rest of their life traveling around the world and enjoying family life. If there is a mention of retirement, then there is also a mention of retirement funds. In such a situation, if you are planning for early retirement, then first check yourself whether you are ready for it or not. How much funds are needed to get early retirement life... it is also important to calculate this.

How to do financial planning?
If you are 30 years old now. You have a good job. If you are planning to retire at 50 years instead of 60 years, then it means you have only 20 years to create a retirement fund. In these 20 years, you will have to save heavily and invest the savings in such an investment scheme or schemes, which will create a fund of crores in 20 years.

How much funding is needed?
If you want to retire early and live a retired life, then how much fund is needed... depends on your current needs, financial goals, and responsibilities. Suppose your salary is 10 lakhs per annum. Annual expenditure becomes 8 lakhs. If we assume the inflation rate to be at least 6%, then you will get an average return of 8% on your investment. In this case, at the age of 50, you need a fund of 10 crores. With this, you will be able to live life for at least 80-85 years.

How will you do financial planning?
Just calculating retirement funds is not enough. You will also have to look at your liabilities. Like the expenses of children's higher studies, if you have a daughter, then the expenses of her marriage, if you live in a rented house, then the responsibility of building your own house, if you have a loan, then its payment. If an elderly person in the house is ill or you fall prey to a major disease, then medical expenses. Overall, the list is long. You will have to plan to keep all these in mind.

What to do and what not to do?

After retirement, do not be passive and rely only on your retirement fund. Keep looking for other income options. Because one day the money will end, but life will continue. More money will be needed to run it. Apart from the retirement fund, you will have to create an emergency fund separately. This becomes necessary with increasing age. If you plan to retire at the age of 50, then you will have to plan to repay your outstanding loan within 10 years. Big expenses come up suddenly, and for this, you will have to keep Plan B ready.

Will SIP create a big fund?

One way to raise a large fund for retirement is through Systematic Investment Plan (SIP). The sooner you start SIP, the bigger the fund will become. If you want to retire at the age of 50, then you should start investment plan and SIP from the beginning of the job i.e. at the age of 25. This will help you create a fund of more than Rs 5 crore by the time you retire. However, any return is subject to market risks.

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