What millennials need to know about retirement planning
1. If you start now, you will enjoy lower premiums for higher coverage
Starting early gives you an upper edge when it comes to building a savings corpus. One of the benefits is your premium costs. Pension scheme premiums are directly proportional to one's age. If you start investing in a pension scheme in our twenties, you will likely receive lower premiums. The later in life one starts investing in a pension scheme, the higher the premiums will be so the insurance company can mitigate the risks associated with old age.
2. Compounding is your best friend
The main reason behind the meteoric growth of any kind of savings corpus is compounding. Compounding is fundamentally determined by the time you remain invested, more than anything else. The more you wait, the less time you allow compounding to work its magic on your investments. Starting retirement planning as early as possible can allow your investments to marinate enough and multiply significantly across the decades. In fact, the more you delay beginning saving for retirement or investing in tools that will build your wealth for a comfy retirement, the less likely you are to leverage the power of compounding.
3. You can take advantage of having fewer financial commitments
Being a young working individual means you have fewer financial commitments right now. In your twenties, you have time on your side to make the most of your investments. Although these financial commitments can add pressure as they are goals you are striving towards, you can easily make the time to add a retirement corpus to your financial portfolio. Starting a family, buying a house, building your career all take time and become responsibilities that you cannot escape in the future. Retirement planning only becomes harder to make time for once these goals become actualities.
4. Don't be afraid of high-risk instruments
Retirement planning requires accounting for your day to day expenses, supporting a spouse, covering for inflation costs, and more. To amass such a large corpus, a few risks might be required from your end. These risks refer to market risks like investing in tools that offer high rewards. The younger you are, the higher risk you can afford to take in your financial portfolio. You have time on your hands to correct your investments that underperform. For instance, if you invest in equity mutual funds early in your career and you stay invested for about ten years, you are likely to make the most of this high-risk investment, simply because you had the time on your hands to remain invested in it for the long haul.
5. Ensure your outstanding debt is covered
Debt can dent your savings and prevent you from growing your wealth at the pace it needs to for a comfortable retirement. Retirement is a time in your life when you need not be fretting about outstanding debt. When you are in any kind of debt, ensure you pay it off as soon as possible. In fact, paying off debt in time is part of the essential financial hygiene everybody should be practicing, irrespective of whether they are retirement planning or not. A heavy interest is applied to outstanding dues that haven't been paid in a long time. Hence, it is vital to ensure you pay off debts before they grow to monstrously costly amounts.
It makes sense to start retirement planningas soon as you can. The earlier you begin, the cheaper your premiums. The HDFC Life Pension Guaranteed Plan offers you the flexibility to receive as yearly, half-yearly, quarterly, or monthly annuity pay-out. You have to pick the purchase price you prefer to pay as premiums or choose the amount of annuity you want to receive as pay-outs, and the HDFC Life Pension Guaranteed Planwill offer them to you as retirement income at the frequency you desire. Hassle-free retirement savings are assured with the HDFC Life Pension Guaranteed Plan. You can start paying your premiums towards this plan and begin or receive your annuity immediately.
Income Tax Slab 2021-22
February 17, 2020
Income Tax Return Guide - Details You Should Know
November 07, 2016
Best Tax Saving Investment Options in 2022 (FY 2022-2023)
November 08, 2016
Subscribe to get the latest articles directly in your inbox
14 Best Investment Options In India
October 30, 2018
Short Term Investments: Top 11 Short Term Investment Options For 2022
November 08, 2016
Insurance vs Investment - Did You Get the Right Financial Plan?
November 05, 2018
Popular & Recent Articles
How to Plan for Retirement as Per your Age
"The thumb rule for retirement planning is - the earlier you start, the more you save. However, with age, your priorities change too. So, you need to factor in the cost of living in the present vis- a -vis future."
HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.
Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: [email protected], Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.
|BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS/FRAUDULENT OFFERS
- term insurance plan
- savings plan
- ulip plan
- retirement plans
- health plans
- child insurance plans
- group insurance plans
- long term savings plan
- fixed maturity plan
- monthly income advantage plan
- income tax calculator
- pension calculator
- bmi calculator
- compound interest calculator
- term insurance calculator
- income tax
- tax saving investment options
- best investment plans
- benefits of term insurance calculator
- what is term insurance
- why to invest in life insurance
- tax planning for salaried employees
- how to choose best child insurance plan
- tips for buying retirement plan
- 1 crore term insurance
- importance of saving
- short term saving plans
- types of investment in india
- investment declaration