5 Retirement Planning Strategies for Late Starters

They say, it is better late than never. But we say why wait till the last moment when you can start early? A lot of people fail to realize the importance of investing at an early stage in their career. By the time they cross the age of 45, they realize that they have very less time in their hand to meet their financial goals. This is why, young investors, especially millennials should understand the importance of financial planning at an early stage in their life. You might need more money to survive in later stage of your life than you need now. This is exactly why it might be a better idea to start saving and investing regularly to attain financial freedom in future.

The more you procrastinate with starting an investment, the lesser time your assets have to grow. If you wait too long then you may not be able to build a decent retirement corpus for your sunset years. Remember that savings itself won’t be enough as you may not be able to tackle obstacles like inflation. Just like saving money is important, it is also important for individuals to invest some of their savings in order to build a retirement corpus in the long run.

Retirement planning should be a part of every individual’s financial planning. Because financial planning is a long term goal and while listing down short term and long term goals, individual should not turn a blind eye on retirement planning. However, due to some unfortunate reason you missed out on starting to invest at an early stage in your life, remember that you can still start and excel if you implement an effective investment strategy.

What is retirement planning?

Retirement planning is allocating a certain portion of your monthly income specifically for your retirement. It is the process of investing your finances in such a way that you can remain financially independent in your golden years. Depending on your income, investment horizon and risk appetite, you may even consider investing in mutual funds to build a decent retirement corpus.

Retirement planning strategies for late starters

Retirement planning with mutual funds might work out in favour of those who are able to manage their money smartly and invest within their boundaries. However, if you are a late starter, don’t worry. Keep the following things in mind and implement these strategies while making a retirement plan and you may be able to achieve what you seek.

1. Be realistic with what you want to achieve

   Remember that you have already missed the bus. So it might not be possible to build a corpus that you might have been able to if you started 10 or 15 years earlier. However, what you can do is empower yourself by estimating a realistic and achieve amount. If you have a realistic figure in mind you may be able to get a clear idea about how much you need to start saving regularly in order to get closer to that goal.

2. Evaluate your existing investments

   You may have an existing EPF (Employee Provident Fund) account that your employer must have set up on your behalf. Apart from that you may have investments in some other schemes that might be due for maturity. Before going ahead and investing in any retirement schemes, it is better that investors take some time out and evaluate their existing schemes. You can even us a PF calculator to get a rough estimate about how much your EPF might fetch you when you retire. Based on that you may go ahead and look for other investment schemes.

3. Understand your limits

   Remember that you will be starting an investment at a stage in your life when you are 10-15 years away from retirement. Make sure that you keep your age, income and existing liabilities in mind while determining your risk appetite. Because if you are considering investing in solution oriented mutual funds like retirement funds, these funds invest predominantly in equity and equity related instruments. You must be well aware about the fact that investments made in equity related schemes never guarantee returns. Hence, it is better to invest within your boundaries when starting late with a retirement planning.

4. Clear all your debts

   If you want to attain financial freedom when you retire you may have to make sure to become debt free. If you have any unpaid loans or any existing credit card bills do get rid of them or they might affect your retirement corpus. The last thing you want is leading a debt ridden when you retire. It is better to become debt free so that you can utilize your savings for investing.

5. Put an end to unnecessary expenses

   One of the hurdles that may come between you and retirement planning is a series of unnecessary expenses. We tend to treat or pamper ourselves with gifts, fancy dinners etc. but these are some of the things that might actually affect your savings and leave you with inadequate corpus in the long run. So it is better that we learn to manage our expenses and keep them to minimum.

Retirement planning at a later stage in life is possible if you keep these little but important things in mind.

Axis Retirement Fund

(An open-ended retirement solution oriented scheme

having a lock-in of 5 years or till retirement age (whichever is earlier)).

Axis Retirement Fund - Aggressive Plan
This product is suitable for investors who are seeking*:
Capital appreciation over long term Investments primarily in equity and equity related instruments.
Axis Retirement Fund - Dynamic Plan
This product is suitable for investors who are seeking*:
Capital appreciation and income generation over long term. Investment in equity and equity related instruments as well as debt and money market instruments while managing risk through active asset allocation.
Axis Retirement Fund - Conservative Plan
This product is suitable for investors who are seeking*:
Capital appreciation & income generation over long term. Investments in debt and money market instruments as well as equity and equity related instruments.

* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.