How to do your financial planning for retirement in India?

Posted by Neha Sharma on March 24th, 2021

After having a very long working journey, you finally decided to rest and enjoy the fruit of hardwork you did throught your professional life but just after this beautiful thought of planning your retirement life, a crucial question hit almost every one which is how should i be planning my finances after the retirement?

This is actually a very important aspect because finances is what we work for our whole life and proper planning and management is must before you take off from your professional life.  Here in this article we have shared some golden rules to plan your finances and investment for retirement in India, so make sure you go through the full article.

The biggest question before making any move

Before making any move or planning anything the very basic question which you must be clear of is how much exactly do you need to invest or save so that your lifestyle won't be affected. We can not predict our life period but a basic norm for planning your financing after retirement would be 15 to 20 years, although this can not be a fixed answer as it depends on person to person. After some basic calculations you will have some estimate figures in your head, one additional tip would be considering inflation as well while calculating these fiigures.

Top Golden rules for retirement financial planning

1. Private and Government Schemes

State governments and central government has various pension and social security schemes like Rajasthan has the Rajasthan Social Security Pension Scheme and Bihar has Mukhyamantri Vridhjann pension scheme. These are just on example of state pension schemes, there are multiple other schemes available for different categories of people.

State bank of India and other Public sector banks have investments schemes specifically for senior citizens in which the citizens gets tax benefits as well. This is also one good option to consider because of the good interest rates.

2. Starting Early

You must have read this in every single post related to financial, investment planning that you should start early but that is for a reason. The more time we give to investments the more return we can expect in our retirement stage, learning the basics concepts like compunding is a must if you are serious about your financial planning. So it is recommended to start planning and investing early, in 20s or max 30s.

3. Planning more than needs 

As we have already mentioned above about the importance of numbers or estimated figures in financial planning, this point is just an addon to that as it is always recommended to have or plan more than just the basic needs. Having planned more than the calculated figures will add up more financial confidence in your retired life.

4. Real estate is one big option

Real estate is a kind of investment which almost gives a guarantee of recurring income. Rental income is increasing every year so investing in real estate is one of the greatest options.So if you manage to save a good money then investing in either commercial or residential property considering the potential rental income is something you must have in your list.

5. Investing in funds

Mutual or pension funds, these are the funds which have the liquidity which is required for a well investment planning. Investing in Mutual funds can get you steady income, although they are not risk free but if we compare it to the primary market it is safer and offers good returns as well.

There are several other investment and saving opportunities available like post office investment scheme, just focusing on the interests is very crucial in creating wealth.