It should be done as we plan for traveling; a short distance travel needs less planning and packing whereas for long distance we plan extensively and pack impeccably. Why? Because we don’t want to be inconvenienced or troubled! Similarly, we have short-term goals in life like an exotic vacation in a foreign land, and for this, six-eight months of planned saving will fulfill your goal but if the goal is long-term, like the higher education of your kid, then a comprehensive plan is needed. An average person plans his finances along 4 major desired events of his life: My life—
1. Child’s Education
2. Child’s Wedding
3. Own Home
An interesting observation is that smart investors give the highest priority to the last goal!
Why is retirement planning of utmost importance?
It is not how much money you earn, but how much money you save!
Retirement, the ‘golden period of an earning individual, holds a very important place when planning financial goals as lack of planning for retirement will usher in its own share of worries, since monthly income or remuneration will stop.
What happens if you don’t plan your retirement?
The best thing money can buy is financial freedom! If there are no investments to fall back on after retirement then financial woes of unpredictable measures will hit you: ? causing mental stress ? physical discomfort ? dependency on others ? Strain on existing savings Thus, your goal should be to ‘Retire Rich.
Where to invest in 2023-2024 for a ‘perfect’ future?
The habit of saving is itself an education! Smartness lies in moving on from the why & what of retirement plans and deciding where to park your hard-earned money for the best retirement plan. Beginning early in life is half the battle won because it is a known fact that the secret to wealth creation is the power of compounding. There are certainly important tools for retirement investment that can help create a corpus for comfortable retired life:
1. Mutual Fund
Mutual funds are the best option today as it gives higher returns and involves less risk. It offers varied options such as debt, equity, stocks, money market funds, etc.
2. Public Provident Fund (PPF)
PPF is a long-term investment plan by the government and is risk-free. The duration of investment is 15 years with an interest of 7.9%. PPF can be availed to a limit only as there are lots of riders attached to it.
3. Fixed Deposit
Fixed deposits offer fixed returns for a certain period of time. This has lost its charm now because the rate of interest is low and inflation is high, so the return is quite less.
4. National Pension Scheme (NPS)
This government scheme lets investors invest in equities and debts that are market-linked instruments. The biggest disadvantage of this scheme is the beneficiary is taxed on withdrawal. The best bet for investing for retirement in this financial year is Mutual Funds as it is capable of bearing the brunt of the Coronavirus pandemic which has created havoc and shattered the economy. Gain control over your money or the lack of it will forever control you! Let Team Fincart help make your future ‘Perfect’!