Step 1: Decide the age at which you wish to retire
While the thumb rule suggests that 60 years is the retirement age, it is a subjective matter that depends on you. For example, you may want to work beyond 60 years of age or conversely may wish to retire at 55; basically, it's a matter of choice.
Estimating your retirement age is an important step because after this age, your regular income stream will stop or at least reduce considerably (in case you are eligible for pension) and you will largely depend on your savings and investments to take care of your needs.
Once you have zeroed in on your retirement age, deduct it from your current age; the intention is to find out the years left for your retirement. This is also the timeframe you are left with to plan for retirement.
For instance, if you are 25 years old at present and you plan to retire at the age of 55 years, you have 30 years (55 less 25) to plan for retirement.
Image: Saving are important! Piggy banks emblazoned with Euro monetary symbols are on display in local gift shops in Brussels, Germany. | Photograph: Mark Renders/Isopress/Getty Images
Also read: From Rs 60,000 to Rs 435 crore!
Advertisement
