As per a 2024 report by the NITI Aayog, 78% of Indian senior citizens don’t have any pension cover. At present, one in ten individuals in the nation is over 65 years old, but this number is projected to increase to one in five by 2050. Simultaneously, life expectancy has increased from 35 years in 1950 to 70+ years presently. A 65-year-old can now anticipate an average life expectancy extension of 15 years. This means you need to ensure you have financial provision enough to last until you are 80 years old.

The best way to start is to look at your finances rationally, understand the gaps, work on them,
and start investing for your future. However, you must straighten a few things before starting
your investment.

Set Your Priorities Straight

Here are a few things you need to do which will allow you to save enough to start investing:

Pay off your debt

Before investing, your first focus should be paying off your debt, especially credit card and high-interest personal loans. You can apply the avalanche method for this; here is how you can do it:

Expense list

Make a detailed list of all your outgoings —mortgage/rent, children’s tuition fees, EMIs, groceries, utilities, dining out, miscellaneous shopping. Analyse your expenses, gauge where you can cut corners, and save instead of splurging. Every small amount you can save will help build your retirement corpus.

Rainy day fund

Ensure you have around five to six months salary corpus as a backup fund. This will cover unforeseen expenses such as repair/maintenance expenses, birthdays/other celebrations, cash in hand in case of job loss, or any such expenses that aren’t accounted for in your monthly budget.

Get Started with Investing Today

If you are a 40+ year-old person who hasn’t started investing for retirement, here is how you can make up for lost time and still be financially secure in your senior years.

Understand how much you will need

Consider you are 40 years old with an income of Rs. 25 lakh per annum, and your monthly expenses as a family, including EMIs and mortgage, are Rs. 80,000. Twenty years later, when you don’t have a consistent income and consider 6% inflation,
your monthly expenses (assuming your expenses stay the same) will be around
Rs. 2.5 lakh.

If you take 10% ROI after investing in a pension plan for 20 years, when you are ready to retire, you need a corpus of Rs. 7 Cr or monthly payments of Rs. 2.5 lakh, for which you need to invest around Rs. 93,000 in retirement planning per month for 20 years.

We have arrived at this figure by assuming you have no assets. Also, if you have a home that is paid for in 20 years, it will reduce your expenses drastically. You also won’t be paying your children’s tuition and utilities in 20 years, so you don’t have to worry about it.

Considering these changes, you and your spouse will still need around Rs. 3 Cr corpus or around Rs. 1.5L monthly to live a comfortable life until the age of 80.

These numbers may seem big, but if you invest your savings in the best retirement plan in India, you can still easily manage to plan for your golden years.

Invest wisely

How you invest now will have a significant impact on your retirement years.

In case if you are unsure where to invest, your best bet is to hire the services of a financial planner who can advise you on investing your money, so you get great returns and tax benefits while you invest.

Prioritize health insurance

Having a personal health insurance policy is a must, even if you have one from your employer. Group Mediclaim policies usually have a limit of Rs. 5 lakhs, which is not enough in case of serious illnesses. If you don’t have a personal insurance policy, you will have to pay the excess bill amount from your own pockets, and that can set you back financially by a considerable margin.

Post-retirement, you will not have health coverage from your employer, and getting one at that age will dig a huge hole in your pocket. To avoid this, buy health insurance that offers you substantial coverage for all possible illnesses and safeguards your and your family’s health and financial future.


The best part about investing in your 40s is that you are in the prime of your career and possibly making more money than ever, which allows you to make larger payments towards investments.

As a 40+ year-old who hasn’t started investing yet, you don’t have to fret. Starting your investment journey early comes with added benefits, but it is never too late to start. If your goals are clear and you are consistent and disciplined with your investment, you will be able to meet your financial goals and spend your retirement years free of any financial burden.


https://www.credible.com/blog/personal-finance/debt-avalanche-method/
https://www.pfrda.org.in/writereaddata/links
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