PARK Financial Advisors

Continuing with our article on building the retirement corpus, we detail how to calculate the monthly savings for your retirement.

This article was published in DNA Money on 15 January 2007.

One needs to understand how big the retirement corpus needs to be to lead a comfortable life in the golden years.

The article was published in DNA Money on 01 January 2007.

India still does not have a universal social security system which provides economic support to individuals across the income spectrum in their retirement years. We define and discuss the structure of pensions in India and the challenges and problems it faces. We believe that retirement planning is of utmost importance for you - and unlike the West, you are on your own!

The common mistake made by many individuals is that they do not plan for retirement early enough. The less common mistake made by those who do start the investment is that they choose fairly conservative debt instruments for their retirement fund. Over periods of time as long as 20-25 years, the risks in equity or such riskier asset classes are more than offset by the superior long term returns. We evaluate various options within equity investments - Of these index funds get your retirement corpus exactly what you need - equity exposure without the hassles of active management.

In many ways, retirement planning is more crucial and more important today for a young or middle-aged working person, than it has been for preceding generations. Fewer and fewer people today are covered by the government sponsored pension programs. Life expectancy has increased significantly as well.

A common misconception is to think of the retirement plan as just an accumulation of a corpus, in whatever form. But a corpus alone does not make a plan! Welook at the various dimensions of a retirement plan, in terms of how they are useful and what factors should one go about looking for in each of them.

Most financial products in the market today are prone to mis-selling - either due to distributor’s lack of knowledge, or worse, his vested interest in earning higher commission.Retirement products and annuities (offered mostly by insurance companies) are no exception. In this article we evaluate specific products and services available in the market and the conditions in which they are beneficial.

Retirement planning is best done and executed when started at an early age. In this way, regular contributions can be more frequent and one can give his money a greater chance to appreciate in the long term. There are two main aspects of retirement planning; one being the accumulation phase and the other being the payment of annuities. The accumulation phase involves building a sufficient corpus to suffice retirement needs.

The mid stage of our lives where we earn and save plays a very important role in the retirement planning process. Every individual feels the dire need to save enough to ensure an early and fulfilling retirement. However, people often neglect the need to start pooling funds for retirement at an early stage and delay the planning to a later stage in life. This is the biggest mistake people tend to commit as planning from an early stage ensures lower contributions towards your retirement corpus. If started at a later stage, the contributions will need to be much higher to make up for the lost time and money. As no one would like to alter his lifestyle after retirement; it is imperative to have a concrete number in his mind to sustain the expenses during the course of retirement. No one would like to undershoot his projections and only starting early ensures that all retirement needs are met in future.