Early Retirement: If you are planning to take retirement at the age of 40 to 50 years, then you will have to prepare a financial strategy for this in advance. Know here what you will have to do for this.
Nowadays everyone is busy in the race to earn money. Be it an employee or a businessman, everyone’s life is so busy that it becomes very difficult to give time to family and close ones. This is the reason why many people start planning for retirement around the age of 40 to 50, so that they can spend quality time with their loved ones in the future. If you also think something like this, then you should do your financial planning accordingly, so that by the time you take retirement, you have enough money to easily live the rest of your life. Know here how you should prepare a financial strategy for this.
How much funds will be needed in old age?
Most experts believe that you should follow the 30X rule regarding retirement fund, that is, your retirement fund should be at least 30 times of your today’s annual expenditure. For example, if you are 50 years old and your annual expenditure is Rs 9,00,000 (monthly expenditure is Rs 75,000), then according to the 30X rule, you should accumulate a fund of Rs 9,00,000×30= Rs 2,70,00,000.
Increase your income
To collect big funds you will have to invest aggressively. In such a situation, you should save 50 to 70% of your income and invest it in various places. Although this is easy to say, it is equally difficult to do because in times of inflation it is difficult for people to save even 50 percent of their income. The way to do this is to increase your income. You can increase your income by doing part time job or doing any extra business etc.
Reduce expenses
Just increasing your income is not enough, to invest big funds you will also have to limit your expenses. For this you have to understand the difference between need and hobby. Try to avoid credit card loans etc. to fulfill unnecessary hobbies. If possible, use public transport instead of going everywhere by your car etc. Apart from this, try whatever way you can to reduce your expenses.
Where to invest
Where to invest is a big question. To deposit a big fund, you will have to choose such schemes where you get high returns. Well, in today’s time, mutual funds are considered a very good scheme in terms of returns. Apart from this, there should be many types of options present in your portfolio. In such a situation, you can take advice from a financial expert in matters of investment.
