NPS For Retirement Planning
Retirement planning is a process of setting retirement income goals and taking necessary steps during the active working years to achieve them.
Importance of Retirement Planning:
- Medical expenses can have a significant impact on the individual’s savings post-retirement. With proper retirement planning, individuals can create a decent corpus to take care of medical costs in the old age.
- In the purview of the rising inflation, the individual may not have the same purchasing power in the future as they have now. As he/she grows old, the individual’s current savings may not be enough to lead a comfortable lifestyle post-retirement. So, the individual must invest in a pension scheme to get inflation-adjusted returns.
- In India, the private sector employees do not have a fallback option like a government-sponsored pension. Retirement planning can help individuals to set their retirement goals, invest in a pension plan, and get a self-sponsored retirement income.
- Today, most Indian families prefer living in a nuclear family. People need to plan their retirement so that they don’t have to rely on any family members for financial help. A good retirement plan not only allows them to live a life of dignity and respect.
5 Simple Steps to Retirement Planning
01 Plan for his/her retirement need. Set his/her retirement goals both short term and long term.
02 Assess their current financial position.
03 Use the retirement tool to determine the corpus required to accomplish retirement goals. The need assessment will help him/her to determine systematic contribution which needs to be done to achieve the retirement goals.
04 Enroll in NPS (National Pension System). it is a scheme specifically designed to meet your retirement goals.
05 Be regular and systematic in your investment in NPS. Earlier you start better your investment grows due to compounding effect in the long run.
Retirement planning is all about making necessary arrangement for getting a steady stream of income in the old age so that individuals can take care of their monthly expenses. When individuals have adequate income post-retirement, they can take care of their every financial need and live a peaceful life.
