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When to stop saving for retirement?

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When to stop saving for retirement?
January 05, 2024

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Securing your financial future through retirement planning is a paramount concern for all of us. We have all heard the mantra: save, save, save, if you want to live well in your golden years. But sometimes, it's okay to hit the pause button on your retirement planning. Let’s break down what you need to think about when it's time to take a breather from the retirement savings hustle.

Factors to Consider in Retirement Planning

Retirement planning isn't a one-size-fits-all concept. It's more like customising your favourite pizza – you want it just right. Here are some things to chew on:

  • Your Retirement Dreams:

    Start by dreaming big. Want to travel, buy a cozy retirement pad, do some charity work, or pick up a new hobby? Your retirement should be about what you love.

  • Living the Long Life:

    How long do you plan to kick back in retirement? Life expectancy in India is a mixed bag. Usually looking at the age of your parents can be a good guess. Play it safe with those estimates, so you don't run out of funds.

  • Healthcare:

    Don't forget the healthcare bills – they can be expensive. Budget for quality healthcare which has coverage of all critical diseases, not just the basics.

  • Fun and Games:

    Save some money for your hobbies. Whether it's golf, painting, or cooking, you have to fund your passions.

  • Safety Nets:

    Always plan for the future. Consider what you would do when in a tough spot. Who's got your back if things get tricky and there are unforeseen expenses? It’s essential to have some investment plan in place as a safety net to fall back onto.

How Much Should I Have Saved by Age 35, 50, and 60?

While these benchmarks aren't specific to everyone, they're like signposts:

  • Age 35: Aim for one to one-and-a-half times your yearly income.
  • Age 50: Try to have three to six times your pre-retirement income salted away.
  • Age 60: Push for 5.5 to 11 times your current salary saved.

But remember, these numbers are like recipes – tweak them to fit your income and goals.

How to Stay on Track with Retirement Saving

  • Employer Perks:

    Make the most of work benefits like Provident Fund (PF) or Employee Provident Fund (EPF).

  • Boost Savings Gradually:

    If you can't save big money right now, don’t worry. Slowly turn up the savings dial as you go along. Be on the lookout for investment plans that match your life goals.

  • Catch-Up Contributions:

    If you're over 50, you can crank up those retirement contributions.

  • Tools of the Trade:

     Use retirement calculators and financial planning tools to stay on track.

How Much Should I Budget for Retirement?

  • Lifestyle and Location:

     Where you live and how your lifestyle is can make a big difference.

  • Healthcare Costs:

    Quality healthcare is a must. One must not compromise on it. Roughly 12-15% of yearly retirement money should be spent on medical bills.

  • Regular Expenses:

    On average, expect to spend around 70-80% of your pre-retirement income. But if you're a leisure enthusiast, plan for a figure around 95%.

In conclusion, retirement planning is a meticulous and dynamic undertaking that requires careful consideration of various facets. While consistent savings and proper investment plans remain a cornerstone of financial security, it is equally essential to remain flexible and responsive to evolving circumstances and personal aspirations. Retirement is not solely about accumulating wealth; it is about living a fulfilled life during your golden years. Stay informed, remain adaptable, and may your retirement be a financially secure and gratifying chapter of life. 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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