Retirement Planning with systematic investment plan (SIP)

The year was 1985. A joint family of 10 persons (two brothers, their wives and children together with their parents) was happy living with limited resources. It was a period of closed economy, limited access to worldwide products and ambitions were limited. It was a period of joint family with lower costs and greater savings.

In 2011 is about nuclear family, children to stay away from parents, thanks to higher studies and jobs, higher costs of medicine thanks to the advances of medical science and more stressful life. Parents retire today are more dependent on their own savings to live by their former life than depending on their children. Imagine if this is the scene today, how would our former life 15-20 years down the line.

Creates a scary picture for us today. Your pension the best period of your life through life for yourself and everything in the work that you can not do during your professional life or have your pension that a painful nightmare depends on how you plan for it in the early years of life are.

The common point is money loses its value over a period of time. A value of the rupee will tomorrow be lower than the value of the rupee today, courtesy monster called inflation. So inflation is the most important factor to plan for retirement.

Now you can claim that a on his/her pension life cut back expenditure during may, but this is easier said than done. Imagine you can travel by public transport once you decommission for whole of your life you have in your personal car converted. You can move to one BHK apartment in the suburb if for your entire professional life you have stayed in an apartment three BHK, in the Centre of the city? So rather than putting yourself in a situation where you to cut down on your expenses, it is better to plan for your retirement.

Medical bills:

Medical costs have become the single most important part of the monthly cost pension period. With the growth of the economy and the advancement of medical facilities is only likely these costs go up with each passing year. Change lifestyle also affects our health. Our previous generations used to walk a few kilometres in a day, while today we use vehicle, even if we want to go to near by grocery store. Private hospitals come with latest but expensive medical facilities. This will definitely add it to our medical bills going forward.

Life Expectancy:

With better quality of life and medical facilities gone life expectancy of the average Indian to 80 years. So if a retire at the age of 55 he goes another 25 years to survive during his/her former life. This is almost equal to his or her working life. This increases the importance and the requirement for good retirement planning.

No Government aid:

Unlike the US and the United Kingdom where they supported government pension scheme and State pension benefit when respectively social security benefit at retirement, the Government of India does not have such advantages. So once again you're on your own.

Are just some government employees and selected private sector workers who get pension after retirement, leaving the majority of the employees on their own.

Approach retirement corpus building:

The basic things to remember is beginning as early as possible and to invest in appropriate investment category. The biggest advantage of starting early in the power of compounding.

For example, Mr. X and Mr. Y both want to retire at the age of 55. Mr. x begins investing when he was 25 years old. He has 30 years to build his retirement corpus. Even if he only Rs. 5000 invests hours in equity investment fund that gives him 15% at the end of 30 years p.a. can grow his money return to Rs. 2.82 cr.

Mr. y begins investing when he reached 40 years. So he has 15 years to build his corpus. He begins with monthly investment of Rs. 10,000 in equity fund which he earns 15% yield. Although the investment value of are four times higher than Mr. X would be the end value is only Rs. 62 lakhs. This shows the power of compounding.

Conclusion:

For each one of us brings a ten-letter word ' retirement ' images of the meeting in the garden of your home with your life-partner, play with your grandchildren as you read the morning newspaper. Take each year to the holiday on a foreign location of your wife. To accomplish this, requires a good planning for his retirement. Retirement planning will change your mindset of ' I want a happy life of former '' I will have a happy retired life '.

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