The importance of retirement planning is only growing as the longevity (life expectancy) is improving, financial planner Anil Chopra from Bajaj Capital tells Zee Business’ Swati Raina during a chat in the popular TV show ‘Money Guru’. There is a long period of 30-35 years after retirement and the expenses are likely to increase only, he added.
Planning should be done for illnesses, which are inevitable at some stage, he further said. Money is also required to fulfill one’s dreams and travels.
His advice to people who wish to plan for retirement is to start now. He said that the time to start retirement planning is when you get your first salary.
See Zee Business Live TV Streaming Below:
Retirement planning can be broken into three phases – accumulation phase, consolidation phase and distribution phase.
Accumulation phase must start from one’s first salary. Accumulation phase must start from the age f 25 years, consolidation from 45 years and distribution phase must start from 60 years of age, Rajiv Shastri, Director & Chief Executive Officer (CEO) from NJ Asset Management said.
He said that the amount of investment does not matter as much as the returns from it considering the inflation situation. The investment should be made with a view that it is able to meet inflation over a long period, Shastri said.
There are two ways to do it, he said. One is that, over a period of time, Gold has been able to beat inflation. The second is equities which has been able to beat inflation consistently.
He said that a large part of one’s asset allocation must be towards equities, which are high risk investments while allocation in debt instruments should be less.
Meanwhile, Chopra’s tips to all youngsters is to save at least 30 per cent annually from their incomes. The 30 per cent saving benchmark is from the gross salary and not the take home salary.
One of the avenues is Mutual Funds, where the investors can spend in the form of SIPs according to their pocket, he further said. It can be later stepped-up, he further said.