Retiring young is a tempting dream especially in a world dominated by uncertainties and stress. No matter what the reason is - sickness, increasing stress at work, monotony, retiring early is much more than socking away money every month. It needs proper planning!
Now the million-dollar question is “Are you prepared for it?” We asked Sheena and she says retirement planning was the last thing on her mind. Being in her early 30s, she had her reasons:
“I am way too young to think about retirement”
“I am hardly making enough money to meet my expenses. Saving right now isn’t possible”
“I will give it a thought after my next increment”
She lived with these reasons until one day she met with an uncertain event. Loans from family and friends, advance pay cheques, she tried everything but nothing lasted long enough to support her. Fortunately, she is back on her feet and didn’t have to quit her job but this incident changed her perceptive. She realized the importance of starting early for a happier and hassle-free life. She didn’t want to take any more chances and followed some basic mantras that she would like to share with us.
1. Accelerate your savings
Haven’t we heard about importance of savings so many times? But the question is ‘Do we follow it right?
An investment as small as Rs.3000 a month in a mutual fund that fetches average 15% returns can get you somewhere around 82.7 lakhs in 25 years. Isn’t it cool? Sheena suggests mutual funds is a balanced instrument for achieving financial goals. To grow your money, she also stresses upon the power of compounding over a period of time.
2. Spend smart
Who doesn’t like to shop, we all do right? The stuff might be different as per our interest areas. The formula of being a smart spender is to stop mixing needs with desires. If you really want to save for retirement, you got to trim the unnecessary expenditures and put those extras in your savings bucket. Start with analyzing your credit card and saving accounts statement regularly.
3. Get your financial basics right
“I don’t need to worry as my portfolio is just fine” Wrong! Your financials need regular review especially when you are planning to retire early. You can invest in instruments like Debentures, Mutual Funds and Corporate Fixed Deposits which normally gives better returns than the instruments like FD, NSCs and PPFs. Experiment and see what can get you higher returns and at the same time can also help in Tax savings.
Sheena suggests keeping an eye on your insurance coverage too. Compare and select policies as per your need. The last thing you would want during your retirement period is huge medical bills denting your pocket. Get a comprehensive cover for your health now!
4. Explore alternate income options
Savings - Check; Spendings - Check; Financials - Check! This brings you to another important aspect of retirement which is exploring an alternative income source. Retirement is the time to shed all your inhibitions and take up those things which you love. Cultivate your hobbies and figure out if you can make some money out of it. Sheena plans to start her own cafe as she loves hosting people with her culinary delights. Likewise, you could think of some options like consulting, freelancing, or maybe starting your own business.
5. Take an expert’s advice
Lastly, Sheena stresses upon the need for an expert guidance to chart out her retirement plan. Also, professional help gave her clarity over various instruments she could invest to achieve her goals. She is taking a step by step approach with 5nance.com. The team has helped her create a realistic retirement plan and she is happily working along to achieve all her goals. The icing on the cake she says, “it is Absolutely FREE!”
What are you waiting for? Get yours today!