To ensure a peaceful old age, it is smart to begin retirement planning while still working. Before you start thinking about retirement, you should calculate the amount of money you’ll require to support yourself and invest wisely. Before considering retirement, individuals should remember these 4 crucial points. By doing this, you can also accumulate wealth like Kubera for yourself as you grow older.
Currently, Rs 1 crore may seem like a large sum, but in a few years, its value will decrease. Remember to contribute sufficient funds that will have significant value when you reach retirement age, and plan your savings and investment strategy accordingly. The question now is, how can you determine the future value of your savings? The Rule of 70 can assist you with this. It explains when your deposit’s value will be cut in half.
To do this, you need to have knowledge of the prevailing inflation rate. If you divide 70 by the current inflation rate, the result will show you the number of years it will take for your total savings to halve in value. Let’s say the inflation rate at the moment is 6 percent. When faced with this scenario, utilize the formula by dividing 6 by 70. 70 divided by 6 equals 11.66, meaning that in roughly eleven and a half years, your savings will be cut in half. If you currently need one crore rupees for a comfortable life, in approximately eleven and a half years, you will need two crore rupees for the same lifestyle since the value of one crore will decrease to 50 lakh rupees.
By doing this calculation, you can estimate the amount you need to save for your own retirement. According to financial guidelines, individuals are advised to save 20% of their earnings and put it into investments. If you earn Rs 40,000, in that case, set aside Rs 8,000 for investing. With the increase in salary, you will also see a 20% increase.