Topic 4: How Important Is Retirement Planning?

Everybody wants to have a financially independent retirement when they have spent time working hard to save for retirement. There may be certain goals or financial obligations that one may consider before thinking about retirement planning. Retirement planning is important for every individual. An individual retires from work, not life. After retirement an individual may have a new set of goals and would also like to maintain a lifestyle without worrying about expenses.

Below mentioned are reasons why retirement planning is important for an individual:

1. Be Emergency Ready
The primary objective of planning for retirement is to ensure you have sufficient funds in case of any kind of emergency. You would not want to be financially dependent on anybody to fulfill urgent financial requirements. If you have a good retirement plan you will be able to build a corpus which can be used in an emergency. 

2. Fulfill Goals
After retirement an individual may have a new set of goals to achieve such as travelling, supporting your child’s business, sending your children abroad, starting a new venture etc. With the right retirement plan you can achieve a corpus to fulfill these goals. If you plan in advance you can create a corpus to help you achieve your future financial goals. 

3. Fight Inflation
Biggest reason why people start investing in pension schemes and retirement plans is to fight inflation. The prices of consumer goods and services have risen, when you choose to invest in a retirement plan you can create a corpus that can help you fight inflation. Things that cost Rs 100 will probably cost more in future planning in advance for retirement can help you beat inflation. 

4. Maintain a Good Standard of Living
You would want to continue your current style of living in the future. Your current expenses are covered under your salary. In future or during your retirement when you are not working, the accumulated retirement fund can help you maintain a decent standard of living even post retirement. 

5. Ensure Income Post Retirement
Retirement planning includes investing in a retirement or pension scheme which can help you ensure a regular income post your retirement. When you choose to invest in a retirement/pension scheme you can ensure a regular source of income to meet your financial requirements and goals post retirement. 

For a salaried person it is very important to start planning for retirement at an early age. There are many circumstances which require funds even after retirement. Planning for retirement at an early age can help you achieve certain financial goals, maintain a good lifestyle, beat inflation and most importantly have funds for any kind of emergency. 

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