How to Make a Retirement Plan in Your 40s

If you are in your early 40s, you might be receiving a lot of phone calls from financial agencies convincing you to invest in retirement schemes. Is this the right time for someone to think about their retirement, which is some 20 odd years away? Isn’t the employee provident fund started by your employer on your behalf sufficient enough to accumulate a decent retirement corpus? The answer to these questions will solely depend on what kind of individual you are and how much money you possibly need to spend your sunset years without any financial burdens.

The 40s is a phase in an individual’s professional career where he/she might have climbed at least half a ladder of hierarchy in their respective streams, and generating a regular income flow. Thinking about retirement planning might not be on your top priorities, but then again, it is something that you cannot turn a blind eye on. Also, the idea of planning your retirement in the 40s might be an ideal time for you to start saving a certain amount every month and invest it in an investment tool depending on your risk appetite.

Another striking thing about some individuals is that they already have their retirement sorted out and hang up their boots from professional careers by the time they reach 40. Although that boat may have sailed for you, there is still a chance of you getting out of your monotonous work life, that too if you wish. It is difficult for all of us to be lucky enough to be working in the industry or profession we are passionate about, you might stand a chance to quit your work and pursue your passion if you are successful in charting out a decent retirement plan.

Here are a few things to keep in mind while planning for retirement in your 40s:

• Inculcate the discipline of saving regularly

Before making a retirement plan, it is necessary that you have some capital saved which you can invest according to your investment objective and risk appetite. But this corpus will only be accumulated if you start saving regularly. Today’s generation tends to spend more and save less. Still, if you want to attain financial independence in future, you need to start omitting unnecessary expenses from your life and start saving more. If you have a moderately high risk appetite and do not mind taking some additional risk with the hope (not guaranteeing) of earning higher returns, you can start investing in solution oriented equity funds via SIP. Systematic Investment Plan is a powerful tool that allows individuals to start investing with an amount as low as Rs. 500 per month. If you regularly invest via SIP and keep a long term investment objective, you may stand a chance to have accumulated some decent figure by the time you near your retirement.

• If you have debts, get rid of them

Remember that retirement is a stage where you will have minimal income sources like pension, hence the earlier you get rid of debts, the better it is. If you have any loans, or unpaid credit card expenses, make sure that you are able to get rid of any such debts as soon as possible. The last thing you want is to be debt ridden without any adequate source of income.

• Diversify your investment portfolio

You may diversify your portfolio with various investment tools. Diversification not only gives you a chance of investing in multiple assets, but it also brings down the risk from your overall portfolio. You can also consider investing in tax saving funds and plan them for long term goals like retirement corpus. This way, you will not only stand a chance to build some corpus, but also continue to claim tax deductions. If you are risk averse and do not mind low but consistent returns, you may opt from traditional investment avenues as well.

• Seek the help of a financial advisor

Financial planners usually possess years of industry experience, and they can club this experience with their expertise in giving investors a sensible piece of advice. If you are new to the world of investing, it is better that you consult an advisor to guide you through your retirement planning.

Although it is better that you seek some professional help before investing, remember that in the end, it is going to be you who is going to take the final call. There are retirement calculators available on the internet for investors to understand how much money they need to invest regularly in order to build a decent retirement corpus.

So if you are someone with moderately high risk appetite and looking for investment options for retirement planning, you can also consider investing in Axis Retirement Fund - Dynamic Plan. This is an open ended scheme which comes with a 5 year lock in / retirement age (whichever is earlier). The investment objective of this scheme is to seek long term capital gains by investing in a mix of equity, debt and other instruments to help investors meet their retirement goals. Although there is no guarantee that the scheme can achieve its objective, if you wish to build a retirement corpus through solution oriented fund investments, you may consider investing in Axis Retirement Fund – Dynamic Plan.

Axis Retirement Fund is a solution-oriented product aimed at building a wealthy retirement corpus for investors.

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.