When Should I start planning for Retirement?

You are never too early or too late to plan for your retirement. Keep these tips in mind-

Quick Tip

It is never too early to start planning for retirement

Quick Tip

You should start saving from the time you get your very first salary

Quick Tip

As your income increases you should increase your savings and investments

It is important to start planning for retirement as soon as possible because the more you save over the years, the more chances that your money will compound over time.

Wondering what is compounding and how it helps retirement planning?

Compound interest is when you earn interest on both the money you’ve saved and the interest you earn.

It works best when you invest regularly and give your money some years to grow.

Let us understand how the power of compounding works for retirement planning with an example.

Rekha is 35 years old. Let us see how much money she will have when she retires at 60 years, if she starts planning for the different stages of her life.

She invests in the National Pension Scheme (NPS) retirement savings plan and gets 9% rate of interest, which is compounded annually.

Let us calculate the amount of money she will save up in 35 years!

Quick Tip

The National Pension Scheme (NPS) is a government scheme which helps you build your retirement fund during your employment.

The interest you earn in NPS is compound interest.

Use our NPS calculator to find out how quickly your money will grow because of compound interest!

Activity

Do the following exercise in your budget notebook-

How old are you? _____
How many years do you still have before your retirement age of 60 years? _____
What is your current monthly income? Rs. __________
How much should you be saving according to the Savings Thumb Rule? Rs. _________
If you save 20% of your income every month, how much will you save in a year?

Answer of 4. x 12 = Rs. ____________

If you continue to save till your retirement age, how much will you have as savings?

Answer of 5. x Answer of 2. = Rs. __________

Use our Retirement Corpus Calculator to figure out how much money you will have in your retirement fund as well as the interest gained on it over time!

Write it down in your budget book-

I will have Rs. ______________ as my retirement fund if I start saving from this month!!

Quiz

Let’s test our skills!

Start

To track your progress