10 Tips for Retirement Planning put to work at age of 30
Only two things are certain death and taxes, however there is one more things that is certian for 80% of all of us, that is Retirement !
Retirement planning should ideally be started once you start earning income. However most of people do not take it seriously till the time they get married and have settled life. The right time to do it is at the age of 30 where you are aware of your responsibility and certain about your career.
Below are some of Tips which can help you to plan and have secured retirement
1) Do not buy a Retirement Plan
Most of the retirement plan of the insurance companies do not provide adequate returns on the investment made. Infact sometime they even fail to beat the inflation. Its always better to Invest for long term say 10 to 30 years via Mutual Fund mode and allocate between debt or Equity.
2) Open a PPF Account
If you are conservative then open a PPF account, save your debt portion of allocation in to PPF and remaining in Equity Mutual Fund.
3) Do not park all money in Single Mutual Fund Scheme
Chose atlest three different scheme between Large Cap, Mid cap and Small Cap funds. Also you can diversify into sectoral funds. If you are availing 80C deduction then go for Tax Saver funds. Always take professional advice if you are not an expert
4) Life Insurance Only if needed
The thumb rules is you need life insurance only if you have dependents or have an housing loan. There is no point to take insurance for childrens and house wife. Further insurance is only to cover risk, so always go for term plan options and not any other products
5) No Second Home
After retirement and during the lifetime, you only need one Home. Second home block money, rather than invest in commercial property and get rental income and appreciation. At young age you can always go for loan for first home, as you will need at least one home post retirement
6) Invest in Gold
Every year buy 1gm or 10gm or 100gm depending on your Income. Gold is safest haven. In case of country or currency risk, gold can be exchanged in any part of world with any currency
7) Mediclaim Policy of Family
Get mediclaim policy for your family sooner as the premium are less when you are young. Always take all reports and disclose all the pre existing conditions, Taking policy for parents is crucial
8) Tax Planning
If you have big family, you can effectively plan your taxes within what is allowed as per Law. Having Big Family – Save More Taxes. You can legally transfer the source of Income to different family members as relatives and each member can enjoy basic exemption limit and deductions. You can also create HUF for long term benefits
9) Make a will
Preparation of Will is must once you have savings of more than Rs 10 Lakhs or you buy an immovable property. Its always good to hire a professional to draft will to secure assets and right succession.
10) Consult a professional
Retirement planning is very subjective and there is no standard formula of one size fits all. You retirement planning depends upon your income, goals, family members who are independent and dependant, your standard of living and may factors. It is always good to hire a professional for the job.