While the average fund at the time of retirement is just Rs 52,000 per individual, people are still keen on contributing to a retirement fund, because traditional structures, such as the joint family, or children supporting parents, are changing. Everyone wants to have a comfortable retirement, but without adequate planning it probably won't happen. The trick is to start early so that you can retire peacefully.
To do this, make a list of your financial goals and what you own, so that the gap between the two is clear and you know what it is you are aspiring for. Assess your incomes and expenditure, and make provisions for contingencies. For example, set aside some money for travel and medical expenditure post retirement. Try to cut down on trivial expenditure - learn to differentiate between the nice-to-have and the need-to-have.
The Ideal Portfolio: As you plan for retirement, your portfolio should consist of a range of instruments (equities, mutual funds, bonds, debentures, property, gold) depending upon your objectives and risk profile. Remember that the older you are when you start to save towards retirement, the harder it becomes.
A Hypothetical Break-Up: Typically, people in their late 20s and early 30s, with family obligations, should begin by looking at property. In fact, up to 50 per cent of your fund should be invested in property, as it appreciates over the long term. Following this should be up to 30 per cent exposure in equities/ mutual funds, to reap the high returns they promise over the long term. Ten per cent in long-term bonds and debentures will yield a fixed return over a period of time. Liquidity is as important, so invest 5 per cent in gold, fixed deposits and 5 per cent in cash.
Source: Rediff business
No comments:
Post a Comment