Complaints on Indian Money Reviews - Frequently Asked Questions on Retirement
How much should you save for retirement?
You can never be sure of how much you should save for retirement. It is different for everybody. Just start saving each month specifically for retirement. Time to time, make sure you increase the quantum of savings.
Keep in mind your retirement goals, responsibilities and post-retirement income like rental income, pension etc. while ascertaining how much you want to save for retirement.
2. Should you start saving for retirement while in college?
This can’t be bad at all. Starting early instills financial discipline in you.
3. Should you save for retirement or children’s college education first?
Saving for retirement is as important as saving for children’s education. You surely want to give your children the best education you can afford. You definitely don’t want to be a burden on your children. Therefore, both should be given equal importance.
4. How to save for retirement and children's education at the same time?
It's not at all easy to save for retirement and children's education at the same time. Education expenses are ever increasing. Is your income also increasing accordingly? You may think so, but don’t forget that inflation eats up most of the hike in your salary.
Postponing retirement means losing out on years of compounding power and tax-deferred growth. Postponing saving for children’s education may mean the need to avail educational loan and years of repayments along with other loan repayments.
5. Should you invest in a pension plan if you are contributing to EPF?
Yes. IT is very important to invest in a separate pension plan. EPF should be kept intact till your working life unless you quit and start a business. In this case, you’ll have to be wary of the tax implications of EPF. Also, with inflation increasing at alarming rates, it is wise to save as much as you can. Invest in Mutual Funds, Equity Funds, PPF, etc. Remember, your retirement portfolio should be diversified.
It should have fixed income earning securities, debt and equity components. Consider PPF and FD to earn for fixed income. Consider debt funds to earn better returns than FDs at moderate risk. Consider ELSS to create wealth over a long-term.