Hello Readers!
I hope you are safe from COVID-19!
The massive spread of corona that is continuously increasing in numbers, has hit the people from all the aspects. It is a reality check for everyone, how much strong immune they have built, till now to fight with the various disease and infections.
Not only the corona spread has questioned about the power of immunity of an individual, but it also has questioned how much financially stable and prepared individuals have made themselves to tackle the topsy turvy situation of their life.
In this Corona Crisis, only a three-month lockdown has shaken the financial condition of many and increased their mental pressure. People from every section, whether it is upper, middle, or lower, have been financially hit hard and are struggling to survive.
Well, here to those people who have been suffering from a hard financial situation due to this three-month lockdown, I want to say, this is a reality check for you, you need to think, If you can’t survive 3 months of lockdown, how will you survive 20 yrs. of retirement?
In news, we have been continuously seeing what hard situation, people of the lower section are going through. Well, the people of the lower section generally believe in earning and spending, they have no strategies of saving money for situations like this. Due to lockdown they have lost their job and are facing financial hardship.
Here the sarcasm is not only lowered section people are facing the financial problem but people of the middle section and upper section, those who are working in a good company, earn a good salary, had good financial support before lockdown, have also been hit hard by this lockdown. These people are also facing financial hardship.
While struggling financially in this lockdown, many individuals have been suffering through mental trauma, while some individuals aren’t able to handle this and have taken the worst decision of their life- To Quit!
Recently we came around the news of suicide committed by a family of Bangalore. In this family both husband and wife were working in a good company, the average income of their family was also good. They were leading a lavish life before the lockdown, but they couldn’t make themselves survive in a 3-month lockdown period. The only thing that this family lack was planning to save money for their hard times.
Not only this but also there are many TV serial celebrities who are struggling financially in this lockdown. TV actor Manmeet Grewal, who worked on shows like Aadat Se Majboor and Kuldeepak, committed suicide after struggling with dwindling finances amid lockdown, family friend-producer Manjit Singh Rajput said.
As per his friend, Manjit Singh Rajput “He was going through a major financial issue and he was also in depression. The added pressure of not being able to repay loans amid this (no work phase) got to him.”
There is also that kind of people who have saved money for their rainy days, but due to lack of a proper plan and right place for the growth of their emergency fund, they aren’t able to build an ideal emergency fund to tackle this three-month lockdown, with a job loss.
The financial problem that many are facing due to this lockdown, has made them realize how much they are reckless towards their financial planning. This all situation is showing the importance of saving and not only saving but investing it at the right place for its ideal growth.
It's okay if you have a good standard of living but at the same time, your financial planning should also be standard, which includes a standard plan your hard times, the standard plan for your retirement, the standard plan for your all big goals.
Due to this lock-down, people are facing a financial problem. Once the corona overs and lock-down open completely, their golden days will be back again. Those who lost their job will join a new company. In their working period people have chances, they can recover themselves from a financial loss and make themself financially stable again, but have they ever thought of retirement days, how will they carry its expenses without proper financial preparation?
Situations like corona-crisis are inevitable and sudden, which is never in our control, what remains in our control is our financial preparation to fight such crisis, but many of us miss it, and keep averting our mind whenever it comes to save for future. However, youth people or working people have the potential to recover their financial loss, but this is very low in the case of retirees.
Thus, a well pre-financial preparation for retirement is a must for every individual, if individuals lack this, it means they have to work in their 80’s also to make themselves survive.
Experts advise always the must include points in your financial budget is Creating an Emergency Fund, and Planning for your Retirement. Creating an emergency fund, that should be equal to your minimum 6-month salary to tackle the situations like a crisis, without any hassle, and a retirement planning to build a good corpus that can help you lead a peaceful retirement.
Pre-planning for retirement expenses become more important, as, during your retirement, you do not have a fixed source for a regular income. It can last longer than what you think, thanks to medical science achievements, it has increased the average lifespan. The days of retirement can be golden days if you are financially well prepared, but they can be black days for you if your retirement planning is not at a place where it should be.
It’s more important than ever to have a realistic retirement savings goal and a solid plan for achieving it.
As per a research, it has been observed that around 70% of major problems arise due to lack of financial support. And when your mind suffers from financial stress, it can force you to take the worst decision.
Thus, if you plan for your retirement at a good place, it does not only give you financial support in your days of retirement but also gift you good mental and physical health.
HOW TO PLAN FOR YOUR RETIREMENT?
Only saving for your retirement cannot give you a stress-free retirement but creating a good corpus for your expense of 20 years of retirement can give you peaceful retirement days.
A good corpus for retirement can only be created if you put your money at a place where it can grow, where it can earn a good interest for you over a good term of the investment. There are a number of investment instruments where you can invest your money for your retirement, like Stock Market, Fixed deposits, Mutual funds, and more. But the best-advised investment instrument for your retirement planning can be mutual funds.
For individuals, when they plan for their retirement, it is advised to them, very first decide what lifestyle you are going to live after you retire, modest daily life, or one that will involve a high standard of living? Once you select your lifestyle, now select what life span of retirement you are going to plan, a span that lasts 25-30 years, or more. Ideally, it is advised to plan your expenses for a minimum of 20 years of retirement. Once you have estimated all these, now it’s the time to calculate an approx. an estimate of your expenses, do not forget to include medical costs and potential long-term care costs.
Now as you have estimated your expenses, your estimated expenses are the corpus that you need to build for your retirement. Fix your term for which you are going to invest, like if you 30 years in age that means you have more 30 years to build your retirement fund. Now you have your tenure of investment and target to reach, calculate your SIP amount per month and start investing in Equity Mutual Funds.
WHY MUTUAL FUNDS IS BEST TO INVEST FOR YOUR RETIREMENT?
There are many reasons that make Mutual funds the best investment for planning your retirement as compared to others like Stock Market, FD’s, and more.
- Mutual Funds have a variety of schemes with different investment objectives and risk, investors can pick out funds that suit their objective and their risk profile.
- Mutual funds offer a good interest rate on your returns when carried for the long-term. They give returns with interest rates up 12-15% in the long-term, whereas FDs give only 7-8%. Although the Stock market offers good returns than mutual funds, at the same time they are riskier than the mutual funds.
- A mutual fund offers inflation-beating returns, that is if you plan your retirement with mutual funds, you need not worry about the inflation eating your returns. Be stress-free, as your investment returns are increasing accordingly with the inflation in the market.
- Mutual funds offer tax benefits, which is not offered by other investments like FD’s and Stock Market.
- Mutual funds offer the option of SIP (Systematic Investment Plan) that allows you to start investing with a small amount. That means you can plan your retirement in the early days of your career and can invest for the long term to create a good retirement corpus.
- Also, SIP helps you build a strong portfolio by adding more units in the portfolio in times of the down market.
HOW CAN WE HELP YOU IN PLANNING YOUR RETIREMENT?
Well, as a financial adviser we can help you calculate your estimated expenses for your 20 years of retirement. We can help you calculate your monthly SIP amount to create your retirement corpus. We can help you pick out the Right Equity Mutual Fund, that best suits your objective and your risk profile, so that you won’t get unstable towards your investment when it starts showing temporary corrections. We keep reviewing your portfolio at times and keep evaluating whether your funds are doing as per your objective. We also do necessary changes in your asset allocation as per your goals, but only with your permission, so that your fund can create the required corpus for your peaceful retirement.
Well, every individual needs to understand the importance of their finances and investment. They must be understood that in order to stand out in situations like a crisis, they need a pre-financial preparation, and to lead a stress-free, peaceful retirement, they need proper retirement planning.
Experts advise always to create an emergency fund, that should be equal to your minimum 6-month salary to tackle situations like a crisis, without any hassle. You can look towards investing in Liquid fund to build a good emergency fund. For your retirement planning, you should look forward to investing in equity mutual funds. It is said it is never too early to plan for your life after you’ve finished your career, you can start developing your retirement plan today.
In case you are having any financial queries and need any kind of assistance on your financial planning or retirement planning, you can talk to us.
For any kind of investment query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).