Planning your retirement is nothing but planning your finances today, so that you can stay comfortable after you retire. It is never to early to start planning your finances. Here are some steps to consider:
1) Start early
It is best to start planning for your retirement at an early age, so that the law of compounding works well. Remember, over a 15 years or more period, the compounding factor could add significantly to build your retirement corpus.
Do not forget, that inflation also tends to eat into your corpus.
2) Know your retirement needs
You must plan your retirement needs in such a way, that you know the quantum of funds that would be needed for your retirement and lifestyle. For example, if you are going to have a lifestyle that includes yearly vacations and other frequent expenditures, you might need to plan for higher amounts.
3) Invest in instruments that yield tax benefits
Look at instruments like pension plans, that could also offer tax benefits. This would ensure that while investing in these plans, you get tax benefits that enhances your savings, even while investing for your retirement.
4) Look at investments that offer higher returns
Look at investments that offer a higher returns than the traditional debt instruments. Taking a long-term view of equity mutual funds with a long-term perspective of 10-years or so. In the longer-term, these instruments can tend to meet specific needs like retirement.
5) Do not dip into your retirement corpus
Ideally, you should not dip into your retirement corpus. Make sure that you have funds for an emergency, without touching a portion of this corpus.
6) Seek advise
To maximize returns, it is also best to seek professional help. Experts, especially certified planners can offer you advise, based on tax savings, returns, your age and ability to take risk. So, do not shy away from seeking professional help.
7) Take adequate insurance
Even when you are young and earning, make sure you take a health insurance policy, that might not be a strain later. Remember, after you retire, you do not spend money on hospital expenditure.