Sunil is working as a marketing manager in a well-established company. He often works 60 hours a week and spends his weekends traveling with friends and enjoying parties. Sunil’s father always asks him to plan for retirement but he overlooked its importance. Seeing this Sunil’s father made him understood the importance of retirement planning.
“Young folks who are just starting their careers have no big financial responsibilities. They face instead of the temptation to spend on partying, shopping, gifts, gadgets, and other indulgences. You have to limit these expenses and start investing in your golden years.
Most people think about savings and investments during their late 30s. At this stage, they can hardly save enough. Their credit cards and loans are dragging their savings, and this becomes a cyclical catch-22 situation that never ends because responsibilities add up with marriage, children, caring for parents, etc. So the message is to start early and to be a regular and disciplined saver and investor.”
Sunil’s father debunked his myths about retirement planning with these points.
I’m not that old:
Here one needs to understand that we are talking about retirement planning, which happens decades before you actually retire. It’s not about hanging your boots next year, but saving for your own golden days when you cannot work full time as you do now.
I’ll wait for a lump sum:
Some people wait to save at a lump sum amount, and then decide what to do. This is a flawed assumption. We are not talking about big or small amounts, but about regular and disciplined savings. Although the target retirement corpus may be huge, you can reach this figure through small savings over the years. New age Ulip is a prudent choice for youngsters like you. You can accumulate a huge retirement corpus by investing a small amount in a new age Ulip plan like Edelweiss Tokio Life Wealth Plus that will not only help you invest systematically but also provide you with additional benefits like tax savings, premium boosters, and a life cover. Waiting for a lump sum of money to accumulate before you begin is just an excuse to postpone your planning or procrastinate.
I’ll receive support from my family:
Most people think that their children will support them in their old age. This is true in some Indian families, but times are changing. Although it is important to have family ties and trust, one needs to have financial independence so that you are not necessarily burdening your future generation, who may have new responsibilities of their own to attend to.
I will not live that long or I won’t retire:
This is one of the most irrational myths that some people use to justify that retirement is not important or necessary for them. The typical lifespan of an average individual is increasing, based on solid statistics. People tend to live longer but they suffer from medical ailments and issues. This is a double whammy because you live longer in poor health, thus increasing your normal living expenses as well as medical costs. So the first assumption is proven wrong. The second assumption is also wrong because today most people retire early when compared to olden days when a person served till the mandatory retirement age and received all retirement benefits. For people working in the private sector, there is not much social security except for the Employees Provident Fund. Retirement from a regular job is certain whether it happens by chance or by choice.
After hearing these points from his father Sunil decided to start investing for his golden years.
If you have not thought about retirement so far, like Sunil, start now before it gets too late.