Help Yourself Retire Rich And Happy
Owning a house, kids education, car, going for holidays, and parents well-being — I am sure I have missed out several things here. Yes I have, the list just starts from here. Beyond this are the numerous other events which mark the life of an average hard-working Indian unless you were born with a silver spoon. Everyone is so engrossed in our day-to-day lives that we forget about the inevitable tomorrow.
Our average work life span’s from 25 to 60 years which means 30 to 35 years of earning life. With massive medical breakthroughs and advancements, the average life of an individual would be 90 years by 2025 which means one has to do without a regular source of income for over 30 years.
My Father who was with the government had a comfortable retired life supported by a decent pension. Gone are those days as government has done away with pension schemes, also a majority of us work in the private sector.
Some quick eye openers:
1) The existing pension schemes are good for an organized workforce that forms about 10% of the total working population. About 90% of the working population is deprived of such benefit as they work in unorganized sectors.
2) Approx 92% of the population working in private sectors is refrained from social security. Only 7–8% of them are covered by pension’s schemes in India
Here is what needs to be done.
a) Start early: The earlier you start saving, the better it is, as the investment required would be lesser. A person who starts saving Rs 5,000 per month from the age of 30 years will have approx 75 lacs at the age of 60 years, if the same person starts at 40 years, he will have only approx 30 lacs only.
b) Analyze your spending patterns and cut down wasteful expenditure: If a couple can sit and jointly analyze their expenditure and areas where they can save, you will be surprised as to the amount of saving small sacrifices can make.
I did the same and we ended up reducing our overall monthly spend by close to Rs 11,000. Start investing this saved amount, just be regular and save for a long-term. E.g. Rs. 5000 Saved for 30 years becomes 75 lacks at 8% return.
3) Savings account: If your hard-earned money is lying in the savings account then it is not savings, it is an amount which is just waiting to be wasted. Invest in a Fixed Deposit, Mutual Fund Schemes, Public Provident Fund also known as PPF or Insurance, but please don’t keep it in your savings account.
4) Be serious and focused: Never break investments, discontinue or delay them, “I will do it later” and this later never comes. Start investing today. Compounding is an investor’s best friend because the power of compounding makes your small amount of money grow into a considerably bigger amount. The longer the time frame, greater the value you will earn.
So the secret to a happy retired life is out, it is up to you to follow it and maximize your gains.
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