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What is the right age to begin retirement planning?

Think you are too young to be thinking about planning for your retirement? Think
again! Here is when you should start actually planning for your retirement.

One of the key goals of financial security is saving for your future. As young working
individuals, we may think that retirement is a faraway goal and we have lots of time to save for
it. However, saving up for retirement is a huge financial undertaking, and having a well-
devised retirement plan from a young age is critical to your overall financial stability and
success.


When planning for retirement while many of us think all we need to do is put money aside in a
retirement fund, the reality is very far from that. One of the most important steps is to
constantly go back to your retirement plan and constantly evaluate how inflation and other
changes in your financial goals and lifestyle are affecting your overall retirement plan.
Adjusting your retirement plan to inflation is perhaps almost as important as saving for
retirement itself.


For instance, if you have parked all your savings in an annuity plan such as the Future Generali
Immediate Income Annuity Plan offers you a range of benefits, including a fixed annuity for
the rest of your life. In case of your unfortunate demise, the purchase price is paid to the
nominee and the policy terminates. Under the plan, you have the flexibility to choose a
monthly or yearly payout mode. In fact, the policy also offers you an annuity card that ensures
convenience in receiving the annuity amount. Under the Future Generali Immediate Income
Annuity Plan, you decide your own purchase price. This means that you decide the single
premium amount that you wish to invest, for receiving a lifelong annuity. This figure should
only be decided after you have taken into consideration all your costs and payments as well as
the impact of inflation.


So given all these factors, when should you start planning for your retirement? In simple
terms, the answer is as soon as possible. One of the key advantages of starting out early is that
you will have numerous investment options at your disposal. If you start investing at an early
stage, there is more of a range of market investment instruments available to you and you are
more willing to take risks and absorb shocks of the market, which enables you to invest in
market instruments that will yield a higher rate of return. However, if you start retirement
planning and investing at a later stage, you will have to stick to fixed return investment
instruments, which yield much lower rates of returns and often might not even be able to
compound against the corroding impact of inflation on your savings.

Additionally, starting to save and invest at an early stage also allows you to take advantage of
the compounding impact of saving. Compounding is often cited as the most valuable asset of
an investor. While compounding is a tough concept to understand mathematically, the benefits
of the same are very easy to understand. Essentially, compounding refers to when the returns
on your investment also become a part of the principal amount of your investment and start
generating returns. This means that the overall returns you gain are much higher than you had
anticipated. Hence, no matter how much you save and invest if you invest in the long run, you
will gain disproportionately higher returns after a certain time period. If you save and invest
earlier and for a longer time period you will be able to take full advantage of compounding and
beat inflation which corrodes the value of your investments. Simply put, the sooner you start
to save for retirement, the more money you will save at a compounding rate.

Regardless of when you decide to start your retirement planning, a key thing to do is to
constantly review and analyze your retirement plan to ensure that your savings and
investments are on track to helping you secure a safe retirement. You should ensure you are
constantly reviewing your expenses and how these affect the overall corpus that you think you
needed to save, while also taking into account the effect of inflation on your savings. If this
seems overwhelming for you, it might be a good idea to consult an expert from time to time to
get a professional outlook on your retirement plan. Hiring a financial planner or an investing
expert may be a worthwhile investment if you are unsure about how to go about your
retirement plan.

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